After nearly a century of operation, U.S. trucking giant Yellow Corp is closing down its business. The company has issued notifications to both customers and employees.
The shutdown follows the company’s recent resolution of a potential strike by approximately 22,000 Teamsters-represented workers. Yellow had committed to paying over $50 million in owed worker benefits and pension contributions to avert the strike.
On Thursday, Yellow announced it was considering selling its third-party logistics division, Yellow Logistics Inc., and was in discussions with multiple interested parties.
Formerly known as YRC Worldwide Inc., Yellow was one of the largest less-than-truckload carriers in the nation, employing around 30,000 people across the country.
The shutdown comes after more than a decade of financial difficulties and a significant loss of customers.
FreightWaves reported last week that employees were informed to expect a filing on Monday. Yellow also laid off an unspecified number of employees on Friday, as noted in a memo that announced the company was “shutting down its regular operations.”
Satish Jindel, president of the transportation and logistics firm SJ Consulting, stated that Yellow managed an average of 49,000 shipments per day in 2022.
By last count, that figure had dropped to between 10,000 and 15,000 daily shipments.
As of late March, Yellow had an outstanding debt of approximately $1.5 billion, including $729.2 million owed to the federal government.
In 2020, during the Trump administration, the Treasury Department provided Yellow with a $700 million pandemic-era loan on national security grounds.
Last month, a congressional investigation found that the Treasury and Defense Departments had “made missteps” in this decision, highlighting Yellow’s “precarious financial position at the time of the loan and its ongoing struggles, which pose a significant risk of loss to taxpayers.”
The government loan is scheduled for repayment in September 2024. As of March, Yellow had paid $54.8 million in interest and repaid only $230 million of the principal, according to government documents.
Additionally, tensions between Yellow and the Teamsters had escalated, with Yellow suing the union in June, alleging that it was “unjustifiably blocking” necessary restructuring plans for the company’s survival.
The Teamsters dismissed the lawsuit as “baseless,” with General President Sean O’Brien criticizing Yellow’s “decades of gross mismanagement,” which included depleting the $700 million federal loan.
