Yellow (a leading trucking company for small businesses, which carved out a niche mainly by offering small-load transport) is filing for bankruptcy, has shut down regular operations, and laid off non-union workers on July 28. Possessing a 6.3% market share of the transport industry, regarding revenue and jobs, Yellow’s collapse would be the biggest historically for U.S. trucking.
The pandemic sparked the recent downturn in 2020 when Yellow took out a $700,000,000 Covid relief loan to invest in new equipment and pay off health care, pensions, and other outstanding obligations. The federal loan was provided because of its services in transporting military supplies for the U.S. government. Despite the additional funding, Yellow continues to net losses as competitors such as Old Dominion gain market share. Old Dominion is succeeding from its streamlined regional and long-haul transport service. Yellow tried to integrate networks from previously acquired acquisitions, such as Roadway Corp. and USF, to stay competitive against this streamline. However, Yellow was slow in implementing this unification due to fears that unifying would inflame workers/unions and displease customers who use the companies separately.
Now facing the harsh reality of structural failure, Yellow faces another obstacle in the form of their workforce. The labor union known as “Teamsters” is protesting against the new contract terms recently offered by Yellow, which they deem unfair. Historically, cuts to employee benefits and wages at Yellow started in 2010 as a result of the 2008 economic crash. Sean O’Brien, the Teamsters president, is steadfast in the Union’s position, having been quoted at an Atlanta rally saying, “We do not want to see any company suffer and go out of business, but at some point, in time, we cannot keep sacrificing wages, conditions that our forefathers and foresisters had fought long and hard for in our freight division.” With negotiations falling through, the end of Yellow seems to be inevitable - along with the jobs of the tens of thousands of workers on strike. Teamsters’ members believe they will find work amongst the other employers connected to the teamsters union once the closure is final.
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