Yellow Freight folds?

[gregintenn]

Let’s not make this a political thread please.

I’m interested in the business/financial impact this might cause the economy.

I assume this is a very large trucking company. Will it’s void be immediately filled by its competitors? Will there be empty store shelves? Will it be bought out and “keep on trucking?”

This stuff fascinates me for some unknown reason.

@Erik88, I figure this might be in your wheelhouse.

[OldIronFan]

"The shutdown comes after Yellow failed to reorganize and refinance the roughly $1.5 billion dollars it had, as of March, in outstanding debt, a large portion of which came from the $700 million pandemic-era government loan."

Too much debt and they could not manage to find any path to refinance it. 

A small amount of turmoil over the next few weeks as customers find alternate carriers. 
Trucking companies are dying for freight and drivers. They will quickly absorb both from YRC. 

Without getting into any political discussion or discussions of unions I will say that the Teamsters did not do YRC any favors. I worked for YRC years ago. I just picked up shifts in the busy season as a side gig but the influence of the union was readily apparent even to me, not in a good way either. 

Edited July 31, 2023 by OldIronFan

[Defender]

1 hour ago, OldIronFan said:

"The shutdown comes after Yellow failed to reorganize and refinance the roughly $1.5 billion dollars it had, as of March, in outstanding debt, a large portion of which came from the $700 million pandemic-era government loan."

Too much debt and they could not manage to find any path to refinance it. 

A small amount of turmoil over the next few weeks as customers find alternate carriers. 
Trucking companies are dying for freight and drivers. They will quickly absorb both from YRC. 

Without getting into any political discussion or discussions of unions I will say that the Teamsters did not do YRC any favors. I worked for YRC years ago. I just picked up shifts in the busy season as a side gig but the influence of the union was readily apparent even to me, not in a good way either. 

Union kills another company.

[derf]

I retired from Federal Express after 32 years. My father retired from Time D.C. truck line after 27 years.  I’ve heard both sides of the union issue and really don’t take a side. Deregulation back in the 70’s made it possible for the little trucker to really make a living. It also allowed larger cargo planes to be used. Both of these caused the available freight to be diluted and small truck lines died off leaving the big companies and cargo airlines to thrive.

It all boilers down to the right management skills to keep any business alive. At my age I have seen many cargo carriers fall. Truck lines and airline cartage agents. 
 

if you want to hear God laugh out loud, tell him your plans! 

[FUJIMO]

From reports I read they've been in trouble for years. Much like the old Skyline Freight in the 90's I'm betting they will be bought up by one of the other larger companies for peanuts and sold off accordingly. In the world of logistics I doubt their closure will even move the needle for more than a week or two.

 

[Chucktshoes]

I have a friend who was employed by YRC until yesterday. The company has been mismanaged and dying for years. They have been repeatedly bailed out by the federal government (most recently $700 million in Covid money) and the Union (multiple concessionary contracts) and the union didn’t so much kill them as refuse to bail them out again letting them drown under their own ineptitude. 

Their customers knew what was coming and over the last year they’ve lost 30% of their volume and over the last number of years have shrank to 9% market share. Yellow was always going to die, it was simply a matter of when.

[Chucktshoes]

20 minutes ago, FUJIMO said:

From reports I read they've been in trouble for years. Much like the old Skyline Freight in the 90's I'm betting they will be bought up by one of the other larger companies for peanuts and sold off accordingly. In the world of logistics I doubt their closure will even move the needle for more than a week or two.

 

Some of their contracts are obligated to go to other union carriers, the rest of them. I expect to get picked up by the big boys. As far as their equipment goes, they’re known for having the oldest rusty ass buckets of bolts rattling down the highway. I imagine a scrapyard will pick them up for pennies because that’s about all the good for. 

[FUJIMO]

3 minutes ago, Chucktshoes said:

Some of their contracts are obligated to go to other union carriers, the rest of them. I expect to get picked up by the big boys. As far as their equipment goes, they’re known for having the oldest rusty ass buckets of bolts rattling down the highway. I imagine a scrapyard will pick them up for pennies because that’s about all the good for. 

Sounds like my kind of rig for the farm lmao. Maybe an absolute liquidation auction in my future

[FrankD]

rumor has it the portion of YRC market share could be picked up by excess capacity in the LTL/TL market.

[Erik88]

2 hours ago, Defender said:

Union kills another company.

That's a poor excuse by people who don't want to take the blame. UPS employees are in the same union and they made $13 BILLION in profit last year. Yellow was poorly managed. 

The longer I work for a corporation the more I come to appreciate unions. 

Drivers are horribly underpaid when you consider what they have to deal with and unions are about their only chance of getting decent pay and benefits. 

 

Edited July 31, 2023 by Erik88

[Erik88]

44 minutes ago, FrankD said:

rumor has it the portion of YRC market share could be picked up by excess capacity in the LTL/TL market.

That's correct. There is so much capacity right now that this will ultimately be the case. I feel for their 30k employees and wish them well.

[No_0ne]

I'm not a trucker, and don't pretend to know anything about that business, but happened on an unrelated article today stating that the entire trucking industry is currently suffering from a glut of capacity and a reduced number of available loads.  According to this article, this industry is noted as having a long history of "boom and bust" cycles, with the huge uptick in shipping during the Covid fiasco and the subsequent slowdown since only exacerbating this tendency.  Assuming that analysis is true, it's logical that the most poorly managed and financed companies would go belly up in such an environment.  Yellow may be the first of several such large freight companies to go under ...

[gregintenn]

25 minutes ago, No_0ne said:

I'm not a trucker, and don't pretend to know anything about that business, but happened on an unrelated article today stating that the entire trucking industry is currently suffering from a glut of capacity and a reduced number of available loads.  According to this article, this industry is noted as having a long history of "boom and bust" cycles, with the huge uptick in shipping during the Covid fiasco and the subsequent slowdown since only exacerbating this tendency.  Assuming that analysis is true, it's logical that the most poorly managed and financed companies would go belly up in such an environment.  Yellow may be the first of several such large freight companies to go under ...

So does this simply mean we are now officially caught up from the Covid fiasco, or does this foreshadow some tough economic times ahead?

[No_0ne]

51 minutes ago, gregintenn said:

So does this simply mean we are now officially caught up from the Covid fiasco, or does this foreshadow some tough economic times ahead?

My guess would be both ...

[Grayfox54]

In my early career I worked in the trucking business. Management seems to have a blind spot when it comes to the trucks themselves. Money gets tight and where do they make cuts? In maintenance, that's where.  Broken down trucks mean delays and unhappy customers. Improperly maintained trucks can also be quite dangerous. Causing accidents and law suits. 

I worked for one outfit where it wasn't uncommon that about the third week of the month, the boss would announce "Boys, we've spent this month's budget. Patch 'em as best you can." I didn't stay there for long. 

Years ago I worked for a small truck line. The boss told me "When my trucks are on the road, I'm making money. When they're in the shop, They're costing me money. Keep my trucks in the road and I'll be happy to pay you to sit on your butt." That company did quite well. 

The big trucking companies just never could understand how simple that was.