'Profound Disappointment:' Yellow Trucking Won't Make It

UPDATE Aug 7, 2023 5:41 AM CDT

There will be no miracle recovery for the venerable Yellow trucking company. The 99-year-old firm filed for bankruptcy late Sunday, reports the Wall Street Journal. "It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business," said Chief Executive Darren Hawkins. The move comes after the company shut down operations and announced layoffs late last month. Yellow hopes to be able to pay wages, salaries, and benefits through a bankruptcy protection deal, and it will start selling its 12,000 trucks and other assets.

Jul 31, 2023 8:00 AM CDT

On Friday, it was reported that Yellow Corp., one of the nation's biggest freight carriers, sent out a memo indicating a shutdown of its "regular operations," with sites closing and an unknown number of mostly nonunion workers laid off (the Wall Street Journal reports "hundreds" were let go). Employee sources also tell FreightWaves that one exec informed them that the company based in Nashville, Tennessee, would be declaring bankruptcy, possibly by Monday. Now, the Teamsters union representing 22,000 of Yellow's 30,000 workers confirms that will be happening, relaying it received legal notice of Yellow's closure and bankruptcy plans, which would make it "the largest trucking bankruptcy in the history of the US," per NPR.

"Today's news is unfortunate but not surprising," Teamsters chief Sean O'Brien says in a release. "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." O'Brien added: "This is a sad day for workers and the American freight industry." The government bailout O'Brien mentions is in reference to the $700 million loan that the company, the nation's third-largest less-than-truckload carrier, accepted during the pandemic—a loan now coming due in September, and which a congressional investigation found last month should probably never have been granted, considering Yellow's "precarious financial position at the time of the loan," per the AP.

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Bruce Chan of the investment banking firm Stifel tells the news agency that even before that loan, Yellow's financial woes were "probably two decades in the making," pointing to bad decision-making and mismanagement over the years. As of the end of March, Yellow claimed $1.5 billion in debt. The Journal notes the nearly century-old company "is known for its cut-rate prices," with 12,000 or so trucks transporting freight from Home Depot and Walmart, among others. An 11th-hour save could always emerge, but Satish Jindel, founder of transportation firm SJ Consulting Group, predicts bankruptcy will be "the end of Yellow," per the AP. A Yellow rep tells FreightWaves that customers seeking information on what the news means for them can call 800-610-6500 or email customer.care@myyellow.com. Much more on the situation here and here. (More trucking stories.)