US-based less-than-truckload carrier Yellow Corporation has filed for bankruptcy as the company prepares for its “planned operational wind-down”.
Transporting shipments for major US brands including Walmart and Home Depot, Yellow has been operating for almost a century.
The firm’s Chief Executive, Darren Hawkins, said: “It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business.”
This comes after a lengthy dispute over wages and pension fund payments with the International Brotherhood of Teamsters (IBT), a union representing 1.2 million workers in North America including 22,000 Yellow employees.
Hawkins blames the company’s ultimate demise on this dispute, saying: “We faced nine months of union intransigence, bullying, and deliberately destructive tactics. A company has the right to manage its own operations, but as we have experienced, IBT leadership was able to halt our business plan, literally driving our company out of business, despite every effort to work with them.”
IBT General President Sean O’Brien unsurprisingly saw things differently. When the news of bankruptcy broke, he stated: “Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government. This is a sad day for workers and the American freight industry.”
The funding that O’Brien refers to came in the form of a $700 million national security loan from the federal government in 2020, partly awarded because Yellow provided 68% of less-than-truckload services to the US Department of Defence. It was part of the US Department of the Treasury’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress during the Trump Administration to address the economic impact of the Covid-19 pandemic.
Hawkins explained that Yellow intends to “wind down [its] business, maximise recoveries for creditors, and pay back the CARES Act loan in full”.
Yellow claims that it is committed to helping its employees find new work and has partnered with the American Trucking Associations (ATA) to launch its first searchable job database, specifically for Yellow employees.