After enduring document profits progress in the course of the COVID-19 pandemic, digital freight brokerage Surge Transportation claims it was forced to file for personal bankruptcy safety as it was unprepared for the abrupt decline in products demand and soaring shipping expenditures that rocked the transportation business in April 2022.
Surge Transportation, headquartered in Jacksonville, Florida, submitted its bankruptcy petition, which seeks to reorganize the business enterprise, in the U.S. Individual bankruptcy Court for the Center District of Florida on Monday.
Prior to the increase in inflation, the war in Ukraine and the easing of COVID-19 restrictions past spring, Surge experienced professional report 12 months-above-calendar year income development of 260% in 2021 and 240% in 2020, court docket filings state.
According to the freight brokerage’s financial statements, which are based mostly on a trailing 12-thirty day period foundation as of March for the past two yrs, Surge posted gross revenues of about $135 million in 2023, a considerable fall of roughly $65 million from $200 million in 2022.
FreightWaves broke the story about Surge Transportation filing for Chapter 11 early Tuesday. The organization strategies to continue functioning as it seeks to reorganize.
“Surge, like several many others in the industry, did not foresee the rapid adjust in the desire for shipping and delivery providers and unsuccessful to minimize overhead in a well timed way,” in accordance to court docket paperwork.
As a result of the company’s failure to pivot to the switching marketplace circumstances, Surge stated that “it turned progressively delinquent in the payment of carrier claims” and owes about $12 million to 5,000 trucking firms.
As of publication on Tuesday, Omar Singh, founder and president of Surge Transportation, experienced not responded to FreightWaves’ request looking for comment.
In its petition, Surge, which was started in 2016, outlined each its belongings and liabilities as getting amongst $10 million and $50 million. The freight brokerage mentioned that it has up to 5,000 collectors and taken care of that resources will be obtainable for distribution to unsecured collectors.
Sixteen of the 20 premier lenders are factoring firms, together with RTS Economical Companies of Dallas, owed approximately $2.5 million Triumph Economic Solutions, also of Dallas, owed extra than $1.4 million and Apex Cash Corp. of Fort Well worth, Texas, owed nearly $660,000.
At the time of its individual bankruptcy submitting, Surge owes wages of about $155,000 to its 43 entire-time and component-time workforce, according to court information. At its peak, the freight brokerage had extra than 100 staff members.
The company’s abroad operations, which are managed as a result of company agreements with Valoroo and Hubtex to offer staffing for Surge’s billing, account reconciliation and other again-office environment providers, are owed $173,000 and $96,500, respectively.
In accordance to courtroom filings, Surge a short while ago amended its factoring settlement with Triumph so that “advances on article-petition receivables factored as a result of Triumph and non-factored receivables will be directed to TriumphPay” in an effort and hard work to get carriers paid out more rapidly employing QuickPay. This arrangement is one particular of numerous emergency motions predicted to be submitted by Surge’s bankruptcy lawyer, Bradley R. Markey, over the up coming two months.
A preliminary listening to is scheduled for Thursday in Jacksonville.
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NOVEMBER 7-9, 2023 • CHATTANOOGA, TN • IN-Particular person Occasion
The 2nd yearly F3: Long term of Freight Competition will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and leisure — that includes dwell demos, market professionals discussing freight market developments for 2024, afternoon networking gatherings, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian tumble weather.