Apx Bankruptcy

Why a Company Files for Bankruptcy:

The first question that needs to be answered before we proceed our topic further is why a company needs to file the petition for bankruptcy. The answer to this question lies in the fact that the company is not able to repay the funds borrowed from other companies or the persons. The accumulated losses are so much that they are not covered by the assets of the company. In that situation, it becomes impossible for the company to repay the money borrowed. And as a last effort to find a solution to the repayments, it files a petition for the bankruptcy. Thus, it can be rightly said that a company goes bankrupt when it is not able to pay back the funds obtained by it through various methods.

Many companies declare themselves bankrupt all over the world. Each company also provides a company a chance to learn from the act of others. One such company that declared itself as bankrupt is the APX Logistics. Let us discuss about it in our next part of discussion.

The Apx Bankruptcy:

First of all, let us know what is APX. It is basically parcel consolidators and is known by the name of APX Logistics. Before going bankrupt, it was the largest parcel consolidators in the United States. Thus, it was really quite shocking when the APX filed for bankruptcy. The company filed for the bankruptcy on March 15, 2006. If one consider all the logistic companies of the world, it is amazing to know that the APX ranks 37 on the Transport Topic list that has been made by taking the top 50 largest logistics companies of the world. So, it is quite obvious that when such a large company files for the bankruptcy, it would make everybody surprised. Before filing for bankruptcy, the APX has more than 400 trucks in its fleet of carriers and the company employed more than 1800 workers. This gives us an idea about the size of the company.

The news of bankruptcy of the APX came become public when the Werner Enterprises filed the SEC form. This company used to provide the truckload services for the APX Logistics. When the SEC was

filed, it stated that when the APX filed a bankruptcy protection on the March 15, 2006, it owed Werner Enterprises $ 7.2 million. This money was outstanding in the form of account receivable and was due because of the freight shipments. It is also to be understood here that the day on which the APX filed for bankruptcy i.e. March 15, 2006; the Werner Enterprises suspended all the freight shipments with the APX Logistics. When the petition for bankruptcy was filed by the APX, the eight affiliates of the APX also filed for bankruptcy subsequently in the Los Angeles. The employees of the APX first come to know about the bankruptcy of the APX logistics when they arrive for work in the Pennsylvania town.

Let us know something about the history of the APX. This company, APX Logistics, was formerly known as American Package Express, is basically a Boston based private equity company and is being owned by the Heritage Partners. The APX was created when the Heritage Partners merged the packaging business of R.R. Donnelly Logistics with the American Package Express and the APX logistics was created. It also added Chester King, who is a former USPS marketing executive, to take care of the postal affairs of the APX logistics.

As per the transport magazine, the Traffic World, it is the largest shutdown of the cargo transportation provider after the closure of the USF Red Star. It happened in the year 2004. One another big logistic company LTX Consolidated Freightways was also shut down in the same way in the year 2001. This was the first comment available by any transport magazine after the APX declared itself bankrupt.

As soon as the news of APX demise was spread, many competitors of APX like the DHL etc scrambled for the signing of the customers of the APX. It is also apprehended that the collapse of the APX would definitely trigger the price increase shipping costs in the long run. So, the big logistics companies are likely to gain from the bankruptcy of the APX logistics.

Lessons to be Learnt:

As said above also, when a company goes bankrupt, it is of course a chance for the other companies to learn a lesson from the whole episode, especially those companies that are working in the same field. Thus, the APX collapse provides all the logistics companies a chance to learn from its bankruptcy.

When the news of bankruptcy became public, there was a wave of panic that went round all those companies that were using the APX logistics for dispatching their all the goods. It was declared that the APX would not be able to provide services from the midnight of the March 15, 2006. Thus it provides a lesson to all those who are using the logistics services every day to dispatch their goods that all the goods should never booked through one logistic company. There are many such companies in the market and a company should at least use two logistic companies to dispatch the goods. So, there should be use of multi carrier options.

There are also many regional transporters apart from the big names. A person should use side by side all these companies so that he is quite apprised of the rates of all the logistics companies and on shut down of any of the companies, other company can be contracted immediately.

The demise of APX also gives a chance to all the logistics companies operating in the same market to learn from the mistakes committed by APX and they should refrain themselves from such activities due to which the mistakes were committed by the APX logistics.

So, Apx Collapses:

After reading the above article, it is clear to all of us under what circumstances the APX Logistics declared itself Bankrupt. There are of course lessons to be learnt from the whole episode and a person should try to imbibe knowledge about all the events that led to the bankruptcy. This would definitely help him in taking many decisions. Thus, APX logistics is no more to cater to the needs of its various customers.

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