Enforcement action by the Federal Motor Carrier Safety Administration temporarily shutting down Land Air Express has the company working to regain business while layoffs and shutdowns are announced.
Less than a month after being placed out of service by FMCSA and just days after being reinstated, Land Air Express has shut down two terminals and laid off employees, The Wall Street Journal reports.
Land Air Express of New England, a carrier with more than 300 trucks, had been placed out of service by FMCSA on Dec. 29. Land Air Express failed to properly test drivers for drugs and alcohol. More than 300 drivers worked for Land-Air, according to FMCSA documents.
On Jan. 7, Land Air Express negotiated a Safety Management Plan with FMCSA and was placed back in service. As part of the negotiated agreement, FMCSA will closely monitor the carrier’s safety performance for the next two years.
However, Land Air Express had already suffered the effects of being shut down by FMCSA as customers took their business elsewhere, according to The Wall Street Journal. Land Air Express had to shut down two of 14 terminals and lay off some employees. Several employees told the newspaper they had not been paid since before Christmas and were told to apply for unemployment benefits.
Bill Spencer, president of Land Air Express, is currently seeking financing to weather the storm. Although Spencer has not approached potential buyers, he told The Wall Street Journal that selling the company is not off the table.
Last October, Land-Air received a “proposed unsatisfactory” safety rating following a compliance review, according to FMCSA Spokesperson Duane DeBruyne. The Vermont-based carrier had 60 days to submit a FMCSA-approved corrective action plan or appeal the rating. Land-Air failed to do either and was placed out of service on Dec. 29.
FMCSA data reveal few negative marks with Land-Air inspections. Vehicle out-of-service averages are in sync with the national average, whereas driver out-of-service rates are below the national average. Nearly 20 percent of hazmat inspections ended in an out-of-service order, well above the national average of nearly 5 percent.