Yellow Corp. Shuts Down; What's Next?
Yellow Corp. shuts down after years of financial struggles. This move could lead to higher rates and benefits for rival carriers.
After years of financial troubles, Yellow Corp., laden with a $730 million government loan, has finally ceased operations. Here are some critical figures surrounding its closure:
- Yellow Corp. held about 7% of the nation's 720,000 daily LTL shipments last year.
- Due to recession fears, an estimated 8% to 10% excess capacity in the LTL sector will likely absorb the impact of Yellow Corp.'s cessation.
- The closure leaves unionized carriers with approximately a 22% share of the LTL market.
- The debt includes a $730 million loan from the federal government, making U.S. taxpayers a 30% equity stakeholder in Yellow.
Its exit is predicted to increase rates for former Yellow Corp. clients but benefit rival large LTL carriers.
Simultaneously, the Yellow Corp.'s bankruptcy highlights the risks associated with high-cost labor and Teamsters battles, suggesting that the alternative might lie in technology-driven solutions. Many logistics companies are turning to automation and process optimization to reduce labor dependency and improve margins.
Source: Logistics Management