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Air Cargo files for Chapter 11, sets layoffs


The Annapolis freight logistics company Air Cargo Inc. filed for Chapter 11 bankruptcy reorganization in U.S. District Court in Baltimore yesterday.

Anne Arundel County officials said last week that Air Cargo would lay off 60 of its 80 workers as a result of the filing. Air Cargo said Friday that it intended to cease some operations immediately and file for bankruptcy protection this week.

The privately held company, created in 1941, primarily is owned by the Carlyle Group, a private equity firm in Washington, and 17 commercial airlines. It manages the movement of ground freight and provides management services such as billing for the airlines and its other 70 clients.

Air Cargo listed more than 200 creditors in its filing. In the documents, the company listed its assets at $16.3 million and debt at $17.9 million.

Doug Faber, the company's president and chief executive, could not be reached for comment yesterday. But he said last week that the company would no longer move freight to and from airports on the airlines' behalf.

Faber said Air Cargo would continue to provide such services as contract management, freight auditing and invoicing and payment services.

It also will continue to publish its Air Freight Directory, an industry pricing guide.

A former executive said yesterday that the problems stem from the company's computer system. Rifts occurred with the trucking contractors that form the extensive network Air Cargo relies on to move freight.

The company had trouble recovering, and it also might have been hurt by the terrorist attacks of Sept. 11, 2001, which grounded air freight temporarily, said David E. Wirsing, a former vice president of Air Cargo who left the company in 1998 when, he said, troubles were beginning.

"I'm very disappointed because Air Cargo did serve a vital role in the air freight industry," he said.

Wirsing, now executive director of the Airforwarders Association, an industry trade group based in Alexandria, Va., said airlines can handle the freight logistics themselves, which could be more costly for them, or hire other logistics companies, which could result in service disruptions.

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