LTL Giant Deeply Cuts Employee Pay After 33% Revenue Decline Due to COVID-19
Waco, TX – Less-than-load (LTL) trucking giant, Central Freight Lines (CFL), is temporarily slashing employee compensation due to a sharp drop in revenue brought on by the COVID-19 pandemic.
In a letter sent to all employees on Tuesday, March 31, Michael Brennan, CFL’s chief operating officer, broke the news that the economic decline precipitated by the enactment of federal, state, and local policies to mitigate the spread of the coronavirus has taken a significant toll on the company.
“The impact on our customers has resulted in a 33% reduction in revenue over the past two weeks alone,” Brennan wrote. “To ensure the future viability of our company and employment of every CFL employee, we are called to act swiftly and judicially; with compassion and consideration for every family that we serve.
Effective March 31, CFL temporarily cut all C-suite executive and vice-presidents’ salaries by 25%.
Directors and mid-level managers had their pay slashed by 20%, while all other salaried office personnel, including secretaries, will see their paychecks reduced by 15%.
CFL is deeply cutting its mileage pay for line-haul drivers as well.
Brennan said these drivers will see a 5 cents per mile reduction.
According to data from the Federal Motor Carrier Safety Administration (FMCSA), CFL operates more than 1,650 power units and employs nearly 1,200 drivers.
Hourly employees, including local drivers, dock and clerical workers, will not see reductions in their per hour compensation, but will instead have their hours reduced.
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Additionally, all employees will see a temporary freeze in benefits such as car and cell phone allowances as well as its 401k program.
“We are doing this to allow as much protection as possible for our CFL family,” Brennan said. “Please know that those who are the highest paid will take the deepest cut.”
CFL Addresses Recent Acquisition
Brennan also addressed the timing of the deep pay cuts as CFL announced just last week it has entered a definitive purchase agreement to acquire Nashville, TN-based Volunteer Express, Inc.
“For some, this may raise the question about our recent merger,” Brennan said.
However, he pointed out the deal “was in the works way before COVID-19 struck.”
The agreement is expected to close on April 5, 2020, and all operations will be officially combined, and the companies will function under the CFL brand, a statement said.
As part of the acquisition, CFL will also lay off 81 employees effective May 23, 2020.
CFL, which operates 69 terminals throughout the U.S., will now add Volunteer Express’s 12 terminals to its operations.
Read more on the terms of the acquisition HERE.
Photo courtesy of CFL