Citing rising operating costs, Priority Transportation has reached agreement with Celadon Group for Celadon to cover customer loads and assist in the collection of tractors and trailers as well as accounts receivables. Celadon will not purchase any assets under the deal, Celadon said.
A Celadon subsidiary signed what the company called a “receivables collection and equipment marshalling agreement” with Priority Transportation, a subsidiary of Priority America. Under terms of the agreement, Celadon has agreed to use “reasonable efforts” to cover certain loads and assist in the retrieval of equipment and collections.
“We are delighted with the opportunity to assist Priority and its customers in an orderly transition of business,” said Steve Russell, Celadon chairman and chief executive officer. “In this situation, a strong carrier can provide needed stability for all involved, and we believe Celadon fits that role. On a longer term basis, one of our goals is to continue to broaden our customer base with quality customers, and add density in our 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.”
Celadon, through its subsidiaries, provides truckload freight service throughout the U.S., Canada and Mexico.
“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.,” said 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.”