One of the nation's largest and oldest
trucking company ceased operations on Sunday,
putting more than 30,000 people out of jobs.
99 year old Yellow notified its union it will be filing for bankruptcy
today for more on what this means for the company and for consumers.
We're bringing in our cheddar news,
senior reporter Michelle Castillo Michelle 30,000 people.
What is the latest on? Yellow?
Yellow is expected to declare bankruptcy today.
The company is the third large,
is less than truckload carrier,
which means it combines many smaller ship loads to make a full truck.
So some of its biggest customers include Walmart Home Depot and Uber freight.
Now we do know that Yellow laid off non union workers on Friday and
this morning it notified its union Teamsters that it will be declaring bankruptcy.
In a statement.
Teamsters General President Sean o'brien said quote,
Yellow has historically proven that it could
not manage itself despite billions of dollars
in work concessions and hundreds of millions
in bailout funding from the federal government.
This is a sad day for workers and the American freight industry.
Now,
the company had been in negotiations with the Teamsters after failing to make a $50
million benefits payment to a pension fund and
it has been floundering in recent years.
So there had already been fears before today's news.
So what does this mean for our shipments for me and you and our viewers?
Well, because Yellow had been on such shaky ground,
many companies have opted to use alternatives.
So for example,
Uber freight had already moved its business to other competitors
recently and Yellow itself had stopped receiving shipments last week.
Other competitors in the space are seeing this as an opportunity.
So yellow shipments make up about 9% of volume in its
category and had most of its business in the Midwest.
Two of the largest less than truckload carriers in the
US who stand to benefit are fedex and Old Dominion.
Now this year outbound shipments are up 7% in
July month over month according to trade publication,
freight waves.
So this is a little completely different from pre pandemic levels.
So in 2018 levels actually fell 7% during the same time period.
While in 2019, it fell about 2 to 3% overall.
This means we're buying more so there could be a little crunch.
Although experts believe that shipping companies can absorb that extra freight,
but Yellow has been known as a company that offered lower rates.
So chances are it customers are gonna have to pay more?
These shipping price increases could be passed on to consumers,
yellow did take a government loan during the pandemic. It has yet to pay that back.
So what does that mean for taxpayers? Now? There is another controversy.
It's in the middle of because this loan has been contentious.
A congressional committee in June found that the Treasury
Department should not have given the loan to yellow.
The pre pandemic era funds were meant for businesses that were quote
critical to maintaining national security and yellow should not have qualified.
That being said yellow still received a $700 million loan
and the US government owns 30% of the company.
Those shares are down more than 40% year to date and yellow
still owes more than $700 million according to its latest quarterly report,
meaning that it's only paid back less than half of its loan.
This will be a huge hit for us taxpayers since it's unlikely
to make that those payments are ever going to be made.
Yellow was supposed to report earnings tomorrow, Michelle Castello.
Thank you so much Michelle.