If Yellow files for bankruptcy and customers continue to take their shipments to other carriers, like FedEx or ABF Freight, prices will go up.
After years of financial struggles, Yellow is reportedly preparing for bankruptcy and seeing customers leave in large numbers — heightening risk for future liquidation. While no official decision has been announced by the company, the prospect of bankruptcy has renewed attention around Yellow’s ongoing negotiations with unionized workers, a $700 million pandemic-era loan from the government and other bills the trucker has racked up over time.
According to Satish Jindel, president of transportation and logistics firm SJ Consulting, Yellow handled an average of 49,000 shipments per day in 2022. As of this week, he estimates that number is down to between 10,000 and 15,000 daily shipments. Even if Yellow was able to sell its logistics firm, it would “not generate a sufficient amount of cash to keep them operational on any sort of permanent basis,” Chan said. “Without a major equity injection, it would be very difficult for them to survive.”
Yellow’s current finances and prospect of bankruptcy “is probably two decades in the making,” Chan said, pointing to poor management and strategic decisions dating back to the early 2000s. “At this point, after each party has bailed them out so many times, there is a limited appetite to do that anymore.”
Did the company just avert a strike? The reports of bankruptcy preparations arrive just days after a strike from the Teamsters, which represents Yellow’s 22,000 unionized workers, was averted.
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