Trucking company Yellow Corp. has declared bankruptcy after years of financial struggles and growing debt, marking a significant shift for the U.S. transportation industry and shippers nationwide.
The Chapter 11 bankruptcy, which was filed Sunday, comes just three years after Yellow received $700 million in pandemic-era loans from the federal government. While a Chapter 11 filing is used to restructure debt while operations continue, Yellow, like other trucking companies in recent years, will liquidate and the U.S. will join other creditors unlikely to recover funds extended to the company.
Former Yellow customers and shippers may face higher prices as they take their business to competitors, including FedEx or ABF Freight, experts say — noting Yellow historically offered the cheapest price points in the industry. The Teamsters, which represented Yellow’s 22,000 unionized workers, said last week that the company gave legal notice for a bankruptcy filing and shut down operations in late July following layoffs of hundreds of nonunion employees.
Those reports arrived just days after Yellow averted a strike from the Teamsters amid heated contract negotiations. A pension fund agreed to extend health benefits for workers at two Yellow Corp. operating companies, avoiding a planned walkout — and giving Yellow "30 days to pay its bills,” notably a total of $50 million owed to the Central States Health and Welfare Fund.
Yellow has racked up hefty bills over the years. As of late March, Yellow had an outstanding debt of about $1.5 billion. Of that, $729.2 million was owed to the federal government.
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