Jevic Transportation shutting down

The trucking firm Jevic Transportation Inc., of Delanco, announced today that it was ceasing operations after 27 years, a victim of high diesel and insurance costs as well as the tightened economy.

The 1,500-employee national firm, with about 1,000 in Burlington County, making it one of the county's largest employers, said it would deliver all freight already within its system before closing entirely.

Peter A. Robinson, director of marketing and corporate communications, said the company had been feeling pressure from the economic downturn for months and had been reducing positions for some time.

"When you are a carrier, you see the recession coming before anyone else," he said. "Customers are shipping less."

Tiffany Wlazlowski, spokeswoman for the American Trucking Associations, said that rising fuel costs had placed huge pressures on trucking firms.

"For many motor carriers, fuel is now equal to labor as the highest expense," she said. "The trucking industry spent $112 billion on fuel in 2007, and we're on pace to spend $141.5 billion in 2008."

Since Jan. 1, 2007, diesel fuel prices have risen from $2.67 a gallon to $4.52 today, according to AAA.

In a letter to employees, Jevic's management said it had been seeking "financing or other alternatives that would have enabled it to continue operations. However, it has been unsuccessful, due in part to unforeseeable tightening of the credit markets."

Jevic is owned by an affiliate of Sun Capital Partners Inc., a leveraged buyout and investment fund in Boca Raton, Fla. Officials from Sun Capital Partners did not return calls.

George Meehan, a Jevic driver hired in 2007, said the shutdown was a surprise.

"Nobody seemed to be aware of anything coming up," said Meehan, who had gone on disability in January and was preparing to return to work.

Pat Prior, 56, a supervisor in the pricing department, said employees were given the news at department meetings today morning. Many broke down in tears, she said.

Prior said that employees generally thought that they were well-treated and believed that they were well-paid.

"No one can bad-mouth the company; it was a good company," said Prior, who had worked at Jevic for 17 years.

Citing rising costs, the company told customers in February that it would increase rates 5.9 percent for most business.

Then, in April, Jevic said it would close four of 10 loading facilities across the country in a realignment of operations.

Robinson said there were some signs, such as increased orders for corrugated boxes, that the economy and industry might recover later this year or in 2009, but not apparently soon enough for Jevic to survive.

Jevic was founded by Harry Muhlschlegel and his wife, Karen, in 1981.

The business was referred to as a less-than-truckload carrier, in which single trucks would make deliveries for multiple customers on one route. Though not unique to Jevic, it was a concept that Muhlschlegel built upon.

At one time, the company had loading facilities in Delanco; Chicago; New York; Charlotte, N.C.; Houston; Los Angeles; and other cities, and its distinctive blue-and-white trucks could be seen around the nation.

By adding a computer-assisted scheduling system, an innovative approach for loading trailers, and developing an intensely solicitous relationship with customers, the company became one of the nation's fastest-growing LTL carriers by the mid-1990s.

The company said that, for most Jevic employees, today would be their last day of employment, but that a limited number would stay on during the wind-down period.

David H. Gorman, Jevic president and chief executive officer, said that the company's Web site would remain active and would be updated for customers tracking shipments.

In a letter to Jevic customers, Gorman said: "I regret to inform you that Jevic Transportation Inc. will be discontinuing operations. The current high fuel costs, economic downturn, increasing insurance costs, and tightening credit markets have made this decision necessary.

"Jevic will stop providing pickup service effective Monday 5/19/08. However, we will continue operating to deliver all freight within our system prior to closing.

"We greatly appreciate the loyalty of our many Jevic customers," he added.

Besides new business systems, Jevic added other distinctive innovations: Its drivers carried business cards, just like senior managers. It was known for good pay and benefits, and thus had little difficulty filling the ranks of its drivers.

Moreover, it made a point of bending over backward to get new customers, and to keep them in the fold.

Yellow Corp. (now known as YRC Worldwide Inc.) acquired Jevic in 1999 for $200 million, all cash. Later, Yellow Corp. spun off Jevic and other units into a separate company, SCS Transportation Inc. In 2002, SCS sold the assets of Jevic to the affiliate of Sun Capital Partners for $40 million plus $12 million in current income-tax benefits, according to announcements at the time.