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Teamsters say trucking giant Yellow Corp. is ceasing operations, filing for bankruptcy

NEW YORK , (Qnnflash) —Yellow Corp., a troubled trucking company, is on the verge of bankruptcy, according to the Teamsters’ announcement on Monday. The company has been grappling with financial struggles and accumulating debt over the years, leading to its imminent shutdown. The anticipated bankruptcy filing is expected to have far-reaching implications for the U.S. transportation industry and shippers nationwide.

Teamsters General President Sean M. O’Brien expressed his disappointment, stating that Yellow’s inability to manage itself effectively despite worker concessions and government bailout funding has been a long-standing issue. However, the company has not yet responded to requests for comments from the media.

Yellow’s financial problems are not a recent development. Industry analysts point to poor management and strategic decisions that span several decades. The company received $700 million in pandemic-era loans from the federal government in the past three years, but this financial assistance proved insufficient to save the business.

With Yellow’s closure, former customers and shippers will have to seek alternative carriers such as FedEx or ABF Freight, likely resulting in higher prices due to Yellow’s historically cheaper price points. As one of the nation’s largest less-than-truckload carriers, the company’s collapse poses a significant risk to around 30,000 jobs.

Last week, reports of Yellow’s bankruptcy preparations emerged, leading to customers leaving the company in droves. On Sunday, Yellow shut down its operations, and earlier in the week, the company reportedly ceased freight pickups. This followed the layoff of hundreds of nonunion employees on Friday.

The situation intensified when the Teamsters averted a strike from the unionized workers after tense contract negotiations. Nevertheless, Yellow’s financial troubles persisted, and it failed to pay a $50 million debt to the Central States Health and Welfare Fund.

Yellow’s outstanding debt stood at approximately $1.5 billion as of late March, with $729.2 million owed to the federal government. The company had made only partial repayments on the $700 million pandemic-era loan granted under the Trump administration.

Financial experts suggest that Yellow’s current predicament is the result of long-term mismanagement and bad decisions dating back to the early 2000s. The company’s daily expenses have escalated, estimated to be around $9 million to $10 million recently, and its shipment volume has significantly declined from an average of 49,000 shipments per day in 2022 to as low as 10,000 to 15,000 daily shipments.

As Yellow’s future becomes increasingly uncertain, the transportation industry and its customers brace for potential disruptions and higher costs in the wake of the company’s downfall.

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