December 13, 2021

Central to Close

Central Freight Lines to shut down after 96 years

Clarissa Hawes, Senior Editor, Investigations and Enterprise Follow on Twitter Monday, December 13, 2021 5 minutes read

Central Freight Lines is planning to shut down. (Photo: Jim Allen/FreightWaves)

2,100 employees will be laid off right before Christmas. Central Freight Lines is the largest trucking company to close since Celadon ceased operations in 2019.

Waco, Texas-based Central Freight Lines has notified drivers, employees and customers that the less-than-truckload carrier plans to wind down operations on Monday after 96 years, the company’s president told FreightWaves on Saturday.

“It’s just horrible,” said CFL President Bruce Kalem.

A source close to CFL told FreightWaves that CFL had “too much debt and too many unpaid bills” to continue operating, despite exploring all available options to keep its doors open.

Kalem agreed.

“Years of operating losses and struggles for many years sapped our liquidity and we had no other place to go at this point,” Kalem told FreightWaves. “Nobody is going to make money on this closing, nobody.”

Central Freight will cease picking up new shipments effective Monday and expects to deliver substantially all freight in its system by Dec. 20, according to a company statement.

A source familiar with the company said he is unsure whether CFL will file Chapter 7 or “liquidate outside of bankruptcy,” but that the LTL carrier has no plans to reorganize.

The company reshuffled its executive team nearly a year ago in an effort to stay afloat, including adding the company’s owner, Jerry Moyes, as CFL’s interim president and chief executive officer. Moyes remained CEO after Kalem was elevated to president in July.

“I think it was surprising that there wasn’t a buyer for the entire company, but buyers were interested in certain pieces but not in the whole thing,” the source, who didn’t want to be identified, told FreightWaves. “Part of it could have been that just the network was so expansive that there was too much overlap with some of the buyers that they didn’t need locations or employees in the places where they already had strong operations.”

Third-party logistics provider GlobalTranz notified its customers that it had removed CFL as “a blanket and CSP carrier option immediately, to prevent any new bookings,” multiple sources told FreightWaves on Saturday.

CFL, which has over 2,100 employees, including 1,325 drivers, and 1,600 power units, is in discussions with “key customers and vendors and expects sufficient liquidity to complete deliveries over the next week in an orderly manner,” a CFL spokesperson said. Approximately 820 employees are based at the company headquarters in Waco.

Despite diligent efforts, CFL “was unable to gain commitments to fund ongoing operations, find a buyer of the entire business or fund a Chapter 11 reorganization,” another source familiar with the company told FreightWaves.

Kalem said the company had 65 terminals prior to its decision to shutter operations.

FreightWaves received a tip from a source nearly two weeks ago that CFL wasn’t renewing its East Coast terminal leases but was unable to confirm the information with CFL executives.

Another source told FreightWaves that some of the LTL carrier’s West Coast terminals had been sold recently, but that no reason was given for the transactions.

At that time, Kalem said the company was “working to find alternatives” and couldn’t speak because of non-disclosure agreements. He said executives at CFL, including Moyes, were trying to do everything to “save the company.”

“Jerry [Moyes] pumped a lot of money into the company, but it just wasn’t enough,” Kalem said.

Kalem said he’s aware that a large carrier is interested in hiring many of CFL’s drivers but isn’t able to name names at this point.

“Central Freight is in negotiations to sell a substantial portion of its equipment,” the company said in a statement. “Additionally, Central Freight is coordinating with other regional LTL carriers to afford its employees opportunities to apply for other LTL jobs in their area.”

As of late Saturday night, Kalem said fuel cards are working and drivers will be paid for freight they’ve hauled for the LTL carrier until all freight is delivered by the Dec. 20 target date.

“I’m going to work feverishly with the time I have left to get these good people jobs — I owe it to them,” Kalem told FreightWaves. “We are going to pay our drivers — that’s why we had to close it like we’re doing now. We are going to deliver all of the freight that’s in our system by next week and we believe we can do that.”

During the outset of the pandemic, Central Freight Lines was one of four trucking-related companies that received the maximum award of $10 million through the U.S. Small Business Administration’s Paycheck Protection Program (PPP). This occurred around the time that CFL drivers and employees were forced to take pay cuts, a move that didn’t go down well with drivers.

“It all went to payroll,” Kalem said about the PPP funds. “Yes, our employees and drivers did take a pay cut over the past few years, and we gave most of it back, even raised pay over the past several months but it just wasn’t enough to attract drivers.”

FreightWaves staffers Todd Maiden, Timothy Dooner and JP Hampstead contributed to this report.

https://www.freightwaves.com/news/exclusive-central-freight-lines-to-shut-down-after-96-years

December 11, 2021

The Oil Blues

World Economy Entering Period Of Oil Scarcity, Halliburton CEO Says

by Tyler DurdenFriday, Dec 10, 2021 – 07:00 PM

Authored by Nicholas Dolinger via The Epoch Times,

Halliburton CEO and president Jeff Miller made waves this week by predicting that the world is due for a period of oil scarcity in comments at the World Petroleum Congress in Houston, Texas.

“I think that for the first time in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer,” Miller said.

Since 2014, the oil industry has generally deemphasized building new infrastructure in the face of low prices. However, that trend may now catch up with the industry, which now finds demand for oil exceeding the available supply given current infrastructure.

Some analysts have speculated that it is increasingly likely that oil prices will soon climb to $100 per barrel, a price unseen in the past seven years and which has serious potential to disrupt the economy.

An additional factor contributing to predicted oil scarcity is a labor shortage in the fossil fuel industry surpassing that in the general economy.

The widespread perception that fossil fuels will be marginalized in the future of energy and transportation makes long-term careers in petroleum unattractive to young workers, with many oil workers seeking to switch to renewables or leave the energy industry outright.

A recent survey revealed that 43 percent of oil industry employees sought to transition to other sectors in the next five years, as reported by Reuters.

As baby boomer employees retire, the industry struggles to replace them with young workers, who see the oil industry as unfavorable to long-term careers because of concerns about climate change models, and pressure by politicians, environmentalists, and investors to transition to renewable energy sources.

This combination of infrastructural underinvestment and labor shortages is likely to result in an oil supply stretched thin to meet demand, resulting in higher prices and possible shortages.

With oil extraction occurring at a significant time lag from industry investment and the skill shortage in the labor industry showing no signs of abating, there are major reasons to believe that any scarcity in oil supplies could last long into the future.

https://www.zerohedge.com/energy/world-economy-entering-period-oil-scarcity-halliburton-ceo-says

December 11, 2021

The Oil Blues

World Economy Entering Period Of Oil Scarcity, Halliburton CEO Says

by Tyler DurdenFriday, Dec 10, 2021 – 07:00 PM

Authored by Nicholas Dolinger via The Epoch Times,

Halliburton CEO and president Jeff Miller made waves this week by predicting that the world is due for a period of oil scarcity in comments at the World Petroleum Congress in Houston, Texas.

“I think that for the first time in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer,” Miller said.

Since 2014, the oil industry has generally deemphasized building new infrastructure in the face of low prices. However, that trend may now catch up with the industry, which now finds demand for oil exceeding the available supply given current infrastructure.

Some analysts have speculated that it is increasingly likely that oil prices will soon climb to $100 per barrel, a price unseen in the past seven years and which has serious potential to disrupt the economy.

An additional factor contributing to predicted oil scarcity is a labor shortage in the fossil fuel industry surpassing that in the general economy.

The widespread perception that fossil fuels will be marginalized in the future of energy and transportation makes long-term careers in petroleum unattractive to young workers, with many oil workers seeking to switch to renewables or leave the energy industry outright.

A recent survey revealed that 43 percent of oil industry employees sought to transition to other sectors in the next five years, as reported by Reuters.

As baby boomer employees retire, the industry struggles to replace them with young workers, who see the oil industry as unfavorable to long-term careers because of concerns about climate change models, and pressure by politicians, environmentalists, and investors to transition to renewable energy sources.

This combination of infrastructural underinvestment and labor shortages is likely to result in an oil supply stretched thin to meet demand, resulting in higher prices and possible shortages.

With oil extraction occurring at a significant time lag from industry investment and the skill shortage in the labor industry showing no signs of abating, there are major reasons to believe that any scarcity in oil supplies could last long into the future.

https://www.zerohedge.com/energy/world-economy-entering-period-oil-scarcity-halliburton-ceo-says

December 10, 2021

More On Recent Acquisition by Saint-Gobain

GCP to help Saint-Gobain target construction sustainability

Al Greenwood

09-Dec-2021

HOUSTON (ICIS)–Saint-Gobain expects its pending $2.3bn acquisition of GCP Applied Technologies will help it capitalise on rising demand for construction materials that can make homes and buildings more energy efficient and sustainable, an executive said.

The boards of both companies approved the deal, and Saint-Gobain expects to close on the acquisition at the end of 2022.

The GCP acquisition falls in line with Saint-Gobain’s focus on light construction and sustainability, the subject of its investor-day presentation in October, said Mark Rayfield, CEO of Saint-Gobain North America. He made his comments in an interview with ICIS.

GCP makes concrete admixtures and cement additives, and these can lower the carbon emissions produced from making concrete.

Concrete produces a lot of carbon dioxide (CO2), accounting for about 8% of the world’s emissions of carbon, according to Chatham House, a UK-based think tank.

“By adding additives and admixtures to cement construction in both infrastructure and commercial construction, you’re decarbonising that industry significantly and driving towards a more sustainable building practice,” Rayfield said. He estimates that these products can reduce the carbon intensity by a third or even higher versus traditional concrete.

Saint-Gobain already produces concrete admixtures and cement additives through its Chryso business, which it acquired earlier this year for €1.02bn. Much of Chryso’s footprint is in Europe and the Middle East. GCP complements this with its larger presence in North America, Asia-Pacific and Latin America.

“This is really building a significant global leader in this type of construction-chemical business across Saint-Gobain,” Rayfield said.

GCP also makes products used in fire protection, roofing underlayments and building envelopes. These products prevent air leakage, water damage and fire.

Saint-Gobain already makes these products, but the GCP acquisition will give the company a larger selection to meet the evolving needs of the construction industry.

The construction industry accounts for 40% of global emissions of carbon dioxide (CO2), and 120 countries have committed to carbon neutrality, Saint-Gobain said during its recent investor day.

To achieve those carbon-neutrality goals, policy makers will impose stricter energy-efficiency standards for buildings. On top of that, some companies are adopting their own energy-efficiency goals independent of government, and these targets could filter down to any buildings they renovate or construct.

Energy efficiency will put new demands on the performance of buildings. To meet those demands, companies will approach building design from a standpoint of systems and not from one of individual products.

“The world you and I grew up in was product, product product,” Rayfield said. “The world we are going into is systems and solutions.”

The GCP acquisition will help Saint-Gobain provide these companies with such systems, be it roofs or facades. The systems will make homes and buildings consume less energy, last longer and feel more comfortable.

CONSTRUCTION OUTLOOK
For residential construction, the US is at a good level of activity, Rayfield said.

However, it has not returned to the highs it reached before the financial crisis of 2007-2008. The following chart shows new housing starts in the US. Figures are in thousands of units and they are not seasonally adjusted.

Source: US Census Bureau

In the years following the financial crisis, the US construction industry has not built enough houses to keep up with the country’s demographics. Based on the rate of family creation, Rayfield estimates that the construction industry underbuilt by 4m houses.

The rate of housing construction is still good, but it is being moderated by supply-chain constraints, labour shortages and limited availability of land, he said.

For nonresidential construction, spending has surpassed its highs from the time of the financial crisis. However, it is still below pre-pandemic highs, as shown in the following table. Figures are in millions of dollars and are not seasonally adjusted.

Source: US Census Bureau

Nonetheless, Rayfield noted signs of recovery. “We’ve seen a lot nonresidenial construction in warehousing and those types of spaces that support the order-from-home type of environment,” he said.

At the same time, companies are renovating revamping offices so they can accommodate post-pandemic work habits.

“You’ll see the market in different areas go at different speeds, but I think it is starting to recover now,” Rayfield said.

That recovery should receive a boost from this year’s $1tr infrastructure package.

Construction uses several coatings, adhesives, sealants and elastomers (CASE), which are important chemical end markets.

The white pigment titanium dioxide (TiO2) is used in paints.

For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation.

Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols.

High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes.

Insight by Al Greenwood

www.icis.com/explore/resources/news/2021/12/09/10714521/insight-gcp-to-help-saint-gobain-target-construction-sustainability/