Yellow (CCJ Top 250, No. 6) pushed back Wednesday afternoon on reports of its pending financial demise, saying the company continues to seek a deal with the International Brotherhood of Teamsters (IBT) labor union that would allow the company to proceed with its regional overhaul and facilitate the refinancing of its mountainous debt.
“Yellow’s talks with the IBT are ongoing," the company told CCJ via emailed statement. "As previously stated, in keeping with the fiduciary responsibility of the company’s executives, the company continues to prepare for a range of contingencies.”
Yellow, the nation’s third largest less than truckload (LTL) carrier, declined to answer whether or not there's any significance to Monday, July 31 – the date the company reportedly has earmarked to file bankruptcy, or if there is any significance currently with regard to anything happening or formally planned for Monday. Yellow, according to IBT, has previously told the union it would run out of cash by August without a union-backed approval of its network makeover – an approval the carrier still does not have and has maintained that it does not need.
The motor carrier is just three years removed from having received a $700 million national security loan from the Treasury Department as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act – a loan the government last month said the company – then YRC Worldwide – shouldn't have received.
Yellow managed to avoid a work stoppage this week that likely would have been the nearly 100-year-old company's undoing, but with a strike looming overhead for several weeks and the possibility of stranded freight, many shipper customers began to seek services through other LTL providers.
"[Current LTL capacity] can absorb most of Yellow's volumes," said Jason Miller, supply chain professor at the Eli Broad College of Business at Michigan State, "but there is an important phrase here: aggregate. When we start getting down to the individual shipper level, things are going to be much more challenging for some shippers relative to others."
John Luciani, COO of LTL Solutions at A. Duie Pyle (No. 67), told CCJ last week that "a sudden and prolonged shipment count increase at 10% could cause some short-term pain," but otherwise felt carriers in the space could handle the boost in volume.
