It's 1:00 pm Pacific time, Monday, July 31, 2023. Industry people and news outlets are still waiting for the official announcement, but all signs say Yellow Trucking company is going bankrupt. In this Freight Waves video from earlier this morning, trucking industry guys talk about the fallout and effects this will have on the U.S. trucking industry.
Yellow Trucking, which has several other firms under its umbrella, ceased operations yesterday. Macroeconomics analyst and researcher, Danielle DeMartino booth, in a recent interview, said Yellow planned to file for Chapter 7 bankruptcy, which means full liquidation. The video above says the same. Truckers had to turn in keys last week, the company has ceased operations yesterday (Sunday 7/30/2023), non-union employees have been laid off, and they report above that the Teamsters union have been notified of the bankruptcy filing. The official announcement should be coming soon.
Yellow Trucking has been around for 99 years, and appears to be the biggest trucking bankruptcy in U.S. history. They had approximately 30,000 total employees, with 22,000 of those being Teamsters, which I presume are all or mostly drivers. Another source reported they have approximately 11,000 trucks. Other reports say Yellow got a $700 million loan through the CARES Act, and I think there was another bailout for them around 2010.
Last week Federal Reserve chairman Jay Powell said The Fed no longer expects a recession in the U.S. this year, in 2023. Yet here's one of the nation's largest trucking companies going out of business, with 30,000 workers losing their jobs. There are a lot of conflicting signals in the financial world these days.
Yellow was a LTL carrier, which means "less than load" shipper. That means they handled lots of freight that wasn't in large enough quantities to fill up an entire truck. If your business needed 1 or 2 pallets of goods shipped somewhere, you would call a company like Yellow, to get it there. A trailer can fit around 12 to 14 standard sized pallets of goods.
The industry guys in the video above talk about how other companies will respond to the freight that now needs a new carrier (higher prices for small shipments expected), whether most of these truckers should be able to find work at other companies. and how the actual hubs, the real estate Yellow owns, and the truck themselves and other equipment, may be bought by other trucking companies.
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