One of the country’s largest freight haulers is shutting down and on the verge of bankruptcy, dragged down by years of ballooning debt and a sudden loss of business. Yellow employs some 30,000 people, including 22,000 Teamsters.
Formerly YRC freight, Yellow is a less-than-truckload shipper, which transports relatively small loads. It is the third-largest company in this category, having delivered more than 14 million shipments in 2022.
Yet, in recent months, tensions with the Teamsters and an inability to refinance $1.3 billion in debt have rocked the company. In late June, Yellow sued the Teamsters, alleging it had been blocking the company’s attempts to restructure its business and refinance debt that included federal government loans. Then in July, the union and the company narrowly averted a strike tied to health-care benefits, leading to a drop-off in business, said Jack Atkins, managing director at Stephens.
The shutdown comes three years after the Trump administration gave the company a $700 million covid-relief loan, which a congressional report released in June said had been the result of “missteps.” That investigationthat the Treasury and Defense departments did not properly justify that Yellow qualified for the loan for national security reasons. In return for the loan, the Treasury Department received a 30 percent equity stake in Yellow.
The “news is unfortunate but not surprising,” Teamsters General President Sean M. O’Brien said in a statement Sunday. “Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government.”
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