Yellow Corp., a Trucking Company, Allegedly Preparing for Bankruptcy: What You Should Know

U.S. trucking giant Yellow Corp. is facing a crisis that could potentially lead to bankruptcy and liquidation, according to sources familiar with the matter. The company, which has been struggling for years, is losing clients at an alarming rate, putting its future in jeopardy.

Although no official announcement has been made, industry experts anticipate that Yellow may file for bankruptcy in the coming days. The company has witnessed a significant decline in daily shipments and numerous customers have abandoned the carrier.

With a staggering debt of approximately $1.5 billion, Yellow’s financial situation is dire. Moreover, $729.2 million of this debt is owed to the federal government. In 2020, Yellow received a $700 million loan from the Treasury Department as part of pandemic relief efforts, which is due for repayment in September 2024.

The root cause of Yellow’s financial troubles can be traced back to mismanagement and questionable strategic decisions dating back to the early 2000s. These poor choices have taken their toll, leading to a loss of $54.6 million for the company in the first quarter of 2023. Additionally, experts estimate that Yellow is burning through $9-10 million each day.

In the midst of these challenges, ongoing discussions between Yellow and the Teamsters, the union representing the company’s workers, continue. The outcome of these talks could potentially have a significant impact on Yellow’s future.

If Yellow ultimately files for bankruptcy, there will be repercussions for the shipping industry. Customers are likely to face increased prices for shipping services as they scramble to find alternative carriers. Fortunately, other carriers in the less-than-truckload (LTL) marketplace have the capacity to handle the diverted shipments in the event of Yellow’s bankruptcy.

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While the future of Yellow remains uncertain, experts increasingly believe that bankruptcy and liquidation are imminent. The trucking industry will closely monitor the outcome of this situation, as it could have far-reaching consequences for both Yellow and its competitors.

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