Celadon Group Inc. announced Tuesday, Aug. 26, that one of its wholly-owned subsidiaries has signed a receivables collection and equipment marshalling agreement with Priority Transportation, a wholly-owned subsidiary of Priority America.
Due to continued high fuel prices, weak freight demand and escalating operating costs, as well as a tight credit market, Priority will be phasing out of most of its over-the-road operations, which include its trucking operations in Farmington, N.Y. and Chesterton, Ind., says Andy Howley, Priority chief executive officer. “We have entered into an agreement with Celadon to assist in the wind-down of operations and to help ensure continuity of customer service,” Howley says.
Under the agreement, Celadon has agreed to use reasonable efforts to cover certain customer loads, assist a secured lender in retrieving tractors and trailers under defined circumstances, and assist in the collection of accounts receivable. Celadon will not purchase any assets under the contract.
“We are delighted with the opportunity to assist Priority and its customers in an orderly transition of business,” says Steve Russell, chairman and CEO of Indianapolis-based Celadon. “In this situation, a strong carrier can provide needed stability for all involved, and we believe Celadon fits that role.”
Russell says that on a longer-term basis, one of Celadon’s goals is to continue to broaden its customer base with quality customers and add density in its primary traffic lanes. “We believe that Celadon can enhance service to Priority’s customers through an upgraded equipment fleet, excellent technology, more available assets for dispatch, and an outstanding safety record,” he says. “Further, Celadon is a SmartWay Transport Partner, with the highest score possible from the standpoint of fuel efficiency. Through its international operations in Canada and Mexico, Celadon can provide a broader range of service to Priority’s customers.”
