BUSINESS

Premium Transportation port trucking firm files bankruptcy

Premium Transportation Services Inc., one of the Southland's biggest port trucking companies, filed for Chapter 11 bankruptcy protection following the loss of several labor disputes.

The Rancho Dominguez trucking company, which is also known as Total Transportation Services, lost 11 claims brought before the California Labor Commission regarding independent contractors who said they should be classified as employees, as well as another 14 lawsuits regarding misclassification, according to the filing in Delaware bankruptcy court. Those losses cost the company $4 million or more.

In addition, the company has racked up legal fees in excess of $4 million since 2014, the filing said.

Aside from legal issues, Premium Transportation has been facing an increasingly difficult business environment, the filing said.

The company "has experienced downward pricing pressure from some of its major clients over the last year," the filing said, while "fixed and operating costs continue to rise."

Premium Transportation serves the ports of Los Angeles and Long Beach. Traditionally, companies like Premium work with truckers who are considered independent contractors, leasing or buying their own trucks.

Independent contractors generally lack the overtime, worker's compensation coverage and other workplace benefits that employees receive.

Port truckers are increasingly working with the International Brotherhood of Teamsters union to argue that they should be classified as employees, not contractors. They have scored a series of recent wins.

The company said that its legal fees, pending labor claims and customer pricing demands forced it to seek bankruptcy protection "to provide a breathing space to stabilize operations and evaluate options for its business going forward."

The company said it has 22 direct employees, and another 74 workers are employed by an affiliate company, Traffic Sales Consulting Inc. Premium has 140 independent operators, or contractors.

The petition, filed Monday, cites $26 million in debt and interest owed under various credit facilities.

Follow Shan Li on Twitter @ByShanLi

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