Big players expected to fill void left by Consolidated. (Up Front).

The unexpected bankruptcy and shutdown of Consolidated Freightways Corp. has unleashed a feeding frenzy to snag cargo previously hauled by the Vancouver, Wash.-based company, much of it unfolding in Southern California.

Consolidated commanded a 15 percent market share of the nation's "less-than-truckload" business--typically long-distance runs between cities, with several smaller shipments filling a truck. It's a different market than at the ports, where trucks pick up container cargo and take it to a fixed destination within the region.

The three remaining LTL large haulers are Arkansas Best Corp., Roadway Corp. and Yellow Corp.

"The freight that Consolidated had can only be handled by those surviving carriers that have that capability," said John Hyre, director of investor relations for Akron, Ohio-based Roadway, which operates a 400-employee terminal in Los Angeles. "You're talking about (companies) that have terminals in all 50 states and in all the major metropolitan areas."

Consolidated filed for Chapter 11 bankruptcy protection on Sept. 3 and laid off all its 15,500 workers. The company had revenues of $2.2 billion in 2001.

With 355 employees and five locations, Consolidated had a significant presence in Los Angeles, home to the country's most-trafficked ports of entry.

Bidding wars

Locally based trucking companies, which generally cover local and regional routes, will likely get a few of Consolidated's long-distance routes, and the tiny portion of its business that served regional or local needs. But mostly, the war will involve the remaining big three.

"There is going to be a percentage available for (local carriers.) But because there are more of them, the competition for that freight is going to be more vigorous," Hyre said.

The likely jockeying among the larger players has most local haulers playing a wait-and-see game to find out whether any new business will be available at a decent rate.

"At this point, it's too early to tell," said Will Pons, manager of Anaheim-based Bullet Freight Systems Inc.'s Los Angeles terminal. "We have to come in with a rate structure to see if it's profitable to handle the business at a discount level. I haven't seen any new business yet."

Some of Consolidated's laid-off workers might find jobs with their former competitors. Of its L.A. County employees, 128 were Long Beach, 108 in L.A., 61 in Santa Fe Springs, 30 in Irwindale and 28 in Pacoima.

Jim Allgaier, branch manager for Yellow's Gardena terminal, said his company has already received 75 to 100 applications for work throughout the region, including 20 to 30 drivers at his location.

The number hired will depend on the increase in cargo Yellow receives. "Because of their experience, many Consolidated employees will receive first look," Allgaier said.

Employee shuffle

Likewise, an increase in the market share would allow Roadway to undo some of the 15 percent staff reductions it has made in the past two years. Roadway, with 26,000 employees, might hire some of the Consolidated staff, Hyre said.

"If some of that work goes to other carriers, to the extent that it exceeds their current capacity, they will need to take on additional employees," Hyre said.

Small companies, however, are cautious not to repeat the mistakes of 1997. when they sought contracts from United Parcel Service contracts during a strike. Many small companies and one of the three giants, Arkansas Best, discovered that they had a shortage of drivers, vehicles and space in trying to handle increased loads.

"They hurt the service to their own customers and ended up losing customers that they already had," said Warren Hoemann, vice president of the California Trucking Association. "There's a tendency of people when they see the opportunity, to grab more than they can handle at one time. You have to be very careful that you don't over-extend your own ability in terms of capacity and service."

Thus far, some local carriers said they are getting some small jobs from existing customers that also did business with Consolidated.

"For me there's no impact other than it's sad to see a 73-year-old company going out of business," said Patty Senecal, vice president of Rancho Dominguez-based Transport Express. "Its displacement of 15,500 people is horrific."