UCS’ parent company abruptly closes brokerage, sources reveal
A freight brokerage based in Nashville, Tennessee, has shut down operations as of Tuesday, resulting in the layoff of approximately 130 employees after its parent company unexpectedly ended its operations, according to sources familiar with the situation.
On Thursday, a manager at Universal Capacity Solutions (UCS) reported that a small team is remaining to assist with the closure and to ensure that trucking companies transporting loads for the now-closed third-party logistics provider (3PL) receive payment.
The manager indicated that reports of some motor carriers being stranded with loads and lacking guidance from the defunct 3PL may stem from miscommunication, as trucking companies struggled to contact the brokers through whom they had booked their loads with UCS.
“It’s chaotic here, but we’ll remain operational as long as it takes to pay all the carriers,” said the unnamed manager to avoid potential retaliation. “We have a small team available, and we are doing our best to respond to as many calls as possible to track down necessary paperwork for these payments.”
Messages from UCS brokers concerning the firm’s closure circulated among certain trucking companies on Wednesday.
Universal Capacity Solutions is fully owned by Universal Logistics Holdings Inc. (NASDAQ: ULH), which is headquartered in Warren, Michigan. ULH manages numerous subsidiaries that provide logistics and transportation services across North America. As of Thursday’s publication, Tim Phillips, president and CEO of ULH, had not commented on the situation.
In December 2009, ULH acquired Cavalry Logistics from its founder, Bob King, and rebranded the Nashville-based 3PL to UCS in January 2020.
Federal law mandates that employers with more than 100 employees notify their workers of mass layoffs. The WARN Act stipulates that employers must provide a 60-day notice prior to significant layoffs. However, exceptions can arise if mass layoffs occur due to unforeseen business circumstances.
Sources aware of the situation noted that the brokerage had been experiencing financial difficulties amid an ongoing freight recession, which has led to the closure or downsizing of numerous trucking and logistics firms in recent years.
“We were under immense pressure to generate profits, but we were all completely taken aback when we learned of the closure,” the manager said. “Everyone who had been with the company for over six months received severance, which is helpful. Issues such as freight fraud, stolen loads, and double-brokering have become significant challenges in this recessionary environment. Operating margins around 8% to 10% mean that losing even one load to theft can completely wipe out the profits for that account for the month.”
