Yellow Trucking Meets Its Demise: What Happened?

Yellow Trucking Meets Its Demise

This week’s demise of Yellow Trucking rocked the truckload and LTL world. Just shy of 100 years old, the company held a fleet of 12,000 trucks and employed nearly 30,000 people. Yellow Trucking was a chief transportation provider for big retailers and e-commerce customers, including Walmart and Amazon.

Several factors led to the collapse, including a series of acquisitions, such as rivals Roadway and USF in 2003 and 2005, respectively. When the 2008 recession hit, Yellow lost a substantial amount of volume from its biggest customers, leading to financial struggle. In the past decade, the company flirted with bankruptcy more than once, but managed to stay solvent until this final chapter. In 2020, Yellow Trucking received a Covid-era rescue package of $700 million from the federal government, something a 2023 Congressional report concluded was a mistake, given the company’s financial straits.

As shipping demand declined this year, Yellow’s finances again took further hits. Between lower volume and lower shipping rates, the company’s holdings fell from around $235 million last December to around $100 million by June. Failed negotiations and impasses with the Teamsters union also hurt the company, and in June, Yellow Trucking tried to defer two pension fund payments. A very public strike threatened by Teamsters gave customers an indication of where the company might be headed, and many sought trucking services elsewhere.

Yellow Trucking Closes & Other Doors Open

With Yellow’s sudden disappearance from the supply chain, many shippers are concerned about disruptions and where to go next. One help to the supply chain is the fact that Yellow Trucking began slowly winding down some of its operations, and since many customers had already jumped ship, they are in good shape. Disruptions shouldn’t be overwhelming to the supply chain.

However, the same thing that got Yellow Trucking into financial trouble was a boon to shippers. Its low rates meant shippers could save money on both truckload and LTL if a Yellow route worked for them. Now they are left looking for affordable alternatives for both.

Several carriers have publicly acknowledged an uptick in interest from potential customers looking to replace Yellow’s services. Carriers have an opportunity to demonstrate their competitive advantages and differences in a situation like this, and customers may find some deals in the shopping process.

When considering new carriers, weigh your decision making on several important factors, the first being the routes offered and whether or not you need regional or national support. Next, you’ll need to consider the specific services shippers offer, from delivery windows to days of the week they operate. You should also look for robust software solutions that can provide you with full visibility and tracking as your products move around the country. Automated scheduling should be part of this package, also. Last-mile services may be an option, too, and is another area to consider when selecting your carrier. Finally, determine in advance the ideal length of contract with a transportation partner before you begin negotiations. If you need assistance in choosing a new carrier, a skilled supply chain consultant is a good place to start.