It's the end of the line for the Preston Trucking Co., an 67-year-old Maryland freight carrier whose orange-and-white trucks have become a familiar sight along Interstate 95.
The regional trucking company says it is shutting down because it does not have enough cash to pay its bills. More than 5,000 people will lose their jobs, though it wasn't immediately clear how many workers were employed at the company's headquarters in Preston, Md., on the Eastern Shore.
"It really is sad to see them fall away like this, because they're one of the venerable players in the industry," said Roger Dick, a spokesman for Yellow Corp., which sold the ailing trucking company last year to a group of Preston managers.
Preston executives said in a statement that their trucks will no longer make pickups and will deliver all remaining freight this week. The company's customers include makers of burial vaults, General Motors Corp. and many others.
"It was a complete surprise," said Sharon Smith, bookkeeper for the manufacturer American Vault and Concrete Products Inc., a Detroit burial-vault maker. "There was no warning or anything."
Smith said her company should be able to ship to dealers without interruption by using other freight carriers. Yet some of her northeastern dealers, she said, have grown attached to the company over the years: "We did have people who preferred Preston."
Closely held Preston had about $450 million in sales last year, but it faced growing competition in its northeastern and midwestern markets. Smaller and scrappier carriers such as New Penn Motor Express and Old Dominion Freight Line have been chasing after Preston's customers. Larger firms such as American Freightways Corp. also have been trying to get a piece of Preston's business.
Preston also is in a slow-growth niche of the trucking industry called "less-than-truckload," said Bob Costello, an economist with the American Trucking Associations. These truckers have higher cost structures because they pick up smaller loads from several customers, haul the freight to a warehouse, consolidate the goods and then reload them on trucks for transport to other cities. Trucking companies that travel nonstop to their destination have lower expenses.
Costello said Preston, like other members of the less-than-truckload group, also may have hurt by the Asian economic crisis. That's because more of their manufacturing customers ship overseas, he said.
Preston, founded in 1932, at first transported produce from farms on Maryland's Eastern Shore to cities across the Chesapeake Bay. Its logo includes the words "151 Line," named for the number of trucks in Preston's original fleet. The company grew to become the 22nd-largest trucking firm in 1997, according to Transport Topics, an online industry publication.
In 1993, Yellow Corp., one of the largest U.S. trucking companies, purchased Preston. But five years later, it was dissatisfied with the carrier's sales and sold it to a group of Preston managers.
Under the new ownership, Preston's financial situation deteriorated. The company said it lost sales last year and was been unable to recuperate.
"On Saturday, July 24, we were informed that our current lenders would not make additional advances that would have permitted our continuing business operations," said Sean Callahan, the company's chief financial officer. "Vigorous attempts to obtain financing from other sources have been unsuccessful."