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Coping with FTG Loss

Industry races to find shipping solutions

Larry Thomas -- Furniture Today, September 29, 2011

LENOIR, N.C. - Furniture manufacturers, importers and retailers were scrambling to arrange shipments and deliveries last week after specialized furniture carrier Furniture Transport Group said on Sept. 19 it would cease operations and liquidate its assets.
     The shutdown, which caught some in the industry by surprise, meant that many companies suddenly had no carrier to move furniture that already had been scheduled for shipment.
     FTG, the largest specialized carrier serving the home furnishings industry, said it is working with customers and competitors "to provide a seamless, high-quality transition of business," but industry logistics experts said it would be several weeks before that transition is complete.
     In the meantime, other carriers have been inundated with phone calls from furniture shippers and retailers - not to mention some of the more than 600 FTG employees who will soon be out of work.
     "We're seeing a significant increase in business," said Stan Froneberger, vice president of sales and marketing at Hickory, N.C.-based SunBelt Furniture Xpress. "But we have been in an expansion mode anyway, so we should be able to absorb it."
     Froneberger and other logistics executives said shipping delays should be minimal as other carriers add business from FTG's customers, but some are concerned about the long-term effect of the shutdown once the furniture industry begins to recover from its prolonged sales slump.
     "In 1990, there were about 30 specialized furniture carriers. Now there are only 10," said Barry Bailey, director of transportation at manufacturer and importer Bernhardt Furniture. "I hope there's enough capacity when things turn around."
     Bailey, who also is cochairman of the American Home Furnishings Alliance's transportation and logistics council, said specialized carriers are vital to the industry because of the special handling required for furniture shipments. For example, specialized carriers don't load furniture shipments with forklifts because of the risk of damage, and unlike general freight haulers, they usually don't place furniture and other products on the same trailer, he said.
     "I'm not sure we want a $2,000 sofa sitting beside a pallet of fertilizer or a barrel of oil," said Bailey.
     Logistics experts said specialized carriers SunBelt, Zenith Global Logistics, Worldwide Logistics and Watkins-Shepard, among others, already have begun hiring FTG employees - particularly drivers and mechanics - and also are interested in buying some of the company's tractors and trailers.
     FTG, the parent company of MGM Transport, Caldwell Freight Lines, Foothills Trucking and Lance Transportation, had approximately 400 employees in Lenoir and 275 in High Point.
     The company said it had been trying to renegotiate financing with its senior lender "for several months without success," and had been unable to secure financing from other sources.
     "It has been determined that an orderly liquidation of substantially all of the company's assets is the only viable course of action," Steven Lusty, who was named FTG's president and CEO in January, said in a press release announcing the shutdown. He said company officials were disappointed with the decision to liquidate and regret the impact it will have on employees, customers, suppliers and the community.
     It wasn't immediately clear if the company planned to file for bankruptcy protection. Company officials did not respond to a request for further comment.

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