Bankruptcy loomed for a century-old American trucking company following reports the bailed-out operations were shuttered Sunday.
Union negotiations and government handouts weren’t enough to keep Yellow Corp. afloat as by noon Sunday the Nashville, Tennessee-based trucking company had ceased all operations. First reported by The Wall Street Journal, the writing appeared to have been on the wall for the 99-year-old company spelling greater troubles for an already stunted supply chain.
Customers and employers alike, including Walmart and Home Depot, were notified that their more than 12,000 freight-hauling trucks were no longer in operation days after hundreds of non-union workers had been laid off.
The move was hardly a surprise to those workers or the roughly 22,000 Teamsters union-represented truckers as FreightWaves had reported a notice of a likely bankruptcy filing Monday had been distributed last week.
As previously reported, Yellow had narrowly avoided a strike from the Teamsters earlier this month after the company that had received more than $700 million in a COVID-era loan was said to owe more than $50 million in contributions to benefits and pensions. Part of the Treasury Department loan, justified under national security reasons, had been used to cover similar delinquencies in 2020.
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Other indicators that the end for the trucking company was a foregone conclusion came as Satish Jindel, president of SJ Consulting, told CNN that Yellow had ceased picking up customer freight midweek and was working to complete deliveries in its system.
A statement from Teamsters President Sean O’Brien lamented the impact the end of operations would have on workers and the country with criticism for the company.
“Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” he said. “This is a sad day for workers and the American freight industry.”
“Teamsters have kept this company afloat for more than a decade through billions of dollars in wage, pension and work-rule concessions,” a spokesman had told the Journal. “Yellow couldn’t manage itself, and it wasn’t up to Teamsters to do it for them.”
According to Jindel, in 2022 Yellow averaged around 49,000 shipments per day, but those numbers had dwindled down to between 10- and 15,000. Furthermore, by March of this year, their reported outstanding debt had reached $1.5 billion, nearly half of which was owed to the federal government.
Though the transportation and logistics firm president didn’t suspect there to be any disruption to services in the supply chain because of the closure of Yellow due to an estimated eight to 10 percent excess in less-than-truckload capacity, customers could see an increase in prices.
“The reason they were using Yellow was because they were cheap,” Jindel told CNN. “They’re finding out that price was below the cost of supporting a good operation.”
The trucking company’s loan to the government is due to be paid back by Sept. 2024, but a review of government documents by Fox Business found that by March only $54.8 million in interest and $230 million in principal had been paid back.
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Native of Brooklyn, NY, Kevin Haggerty is a graduate of Hunter College where he studied Cultural Anthropology and Geography. An avid reader and truth seeker, he currently resides in Texas with his wife and their dog and, when he isn't researching current events and their impacts, you'll find him spending time with friends and family or working on his next novel.
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