The exit of Consolidated Freightways Corp. (CF) from the national less-than-truckload (LTL) market last month will have a measurable impact on shippers and the trucking industry. One of the nation's largest motor carriers, CF had run its trucks, with their familiar red and green markings, on the nation's highways for 73 years.

The company, headquartered in Vancouver, Wash., announced on Sept. 2 that it would halt its trucking operations and file a petition for Chapter 11 bankruptcy protection. Although it quit the motor carrier business, CF said it would continue to operate its freight forwarding subsidiary, CF AirFreight, as well as Canadian Freightways Ltd. CF laid off most of its drivers and terminal employees immediately, sparing only some management personnel to oversee the liquidation of its business.

The abrupt closure left many shippers with cargo stranded at CF terminals. "The CF hubs are jam-packed with freight," says Ray Bohman, a transportation consultant and Logistics Management columnist. Not only have shippers had to scramble to make arrangements to have their freight released and picked up, Bohman says, but they're finding that railroads that moved CF's intermodal shipments are refusing to release that freight until they receive payment for their services.

CF's bankruptcy filing could bring other headaches for some of its shipper customers. Transportation lawyer William J. Augello, executive director of the Transportation Consumer Protection Council Inc. (TCPC) and also a Logistics Management columnist, says he's concerned that shippers may again find themselves confronted with claims of inadequate payment on past freight shipments. Augello says he expects collection agencies will seek the bankruptcy trustees' permission to audit CF's bills in order to dun shippers for penalties assessed on late payments and "undercharges." (Undercharges are claims by collection agencies representing bankrupt carriers that shippers were incorrectly billed. The agencies demand payment for the difference between what shippers paid and the so-called "correct" invoice.) "TCPC is forming a joint defense group for defending shippers and receivers who may be sued for these penalties, as we have for over 200 carrier bankruptcies since 1980," Augello notes.

It's not only CF's customers, but all LTL shippers, who will feel the impact of the demise of one of the country's largest motor carriers. Bohman says that CF's departure means that shippers now have only a few options for national LTL freight service: Yellow Transportation, Roadway Express, Con-Way Transportation Services, ABF Freight System, FedEx Freight, Overnite Transportation and Watkins Motor Lines. He expects that Roadway and Yellow will pick up the majority of CF's shipments.

Another area of concern is freight rates. Shippers can expect to pay more for LTL shipments, not just because there will be less competition but also because CF played a role in driving down rates. "CF was the rate cutter, especially on the long-distance lanes, so prices should firm up," says Robert V. Delaney, a vice president at Cass Information Systems and logistics industry expert. "Shippers are looking at higher prices for a multiyear period," agrees Greg Burns, vice president of research at JP Morgan Chase in New York City. "[CF's demise] was necessary because no one in the industry was making any money," he adds. "There will be better industry profits for the remaining players."

Although a general rate increase appears unlikely at this time, industry experts expect that the remaining carriers will effectively raise rates by reducing the discounts they're now giving to many shippers. Shippers will also probably see higher charges for such special services as inside deliveries. "We won't see a general rate increase," Bohman predicts, "but it's certain that rates will go up."