The news of Yellow Corp’s closure has hit hard for many of its employees and customers.
After nearly a century in operation, the trucking giant shut down its operations and filed bankruptcy, leaving 30,000 workers out of jobs and with uncertain futures.
The Teamsters Union has blamed decades of mismanagement for the company’s financial struggles while Yellow Corp claims that union contracts were blocking plans to modernize.
With $1.3 billion in loans due next year, including $729 million owed to the government, it is clear that the collapse of this once-dominant player in transportation will have wide-reaching implications for Americans everywhere.
When looking back at how we arrived at this point with Yellow Corp, one can’t help but wonder: why did it fail?
According to FreightWaves, “Yellow (NASDAQ: YELL) is the third-largest LTL company and employs some 30,000 workers.”
That means that despite being a major employer in many areas around the country, it was unable to keep up with competitors when it came to cutting costs or making other cost-saving decisions necessary for businesses to stay afloat in today’s competitive market.
A memo sent by Teamsters’ negotiating committee suggests that they were not able to reach an agreement on a new contract which could explain why their freight services declined so rapidly preceding their ultimate shutdown.
Moreover, according to CNN, just a week before announcing their closure they had been granted an extra month by their unionized employees due to failing pension payments—a strong indicator that something serious was wrong within their organization long before they had admitted defeat publicly.
With nearly 30,000 people now without jobs as a result of this shutdown and bankruptcy filing there are bound to be ripple effects throughout our economy as these individuals no longer have access to income or benefits previously provided by Yellow Corp.
t seems likely that shipping costs will rise across the board as well now that Yellow is no longer around competing against other companies for business—not good news considering most already struggle with high transportation fees when sending packages domestically or internationally.
So THAT's what happened to #Yellow $YELL… "Trucking company… shuts down operations, files for #bankruptcy…" #POWERLunch #CNBC pic.twitter.com/JShMCXssM5
— Jimmy Slamat (@jslamat) July 31, 2023
