Trucking giant Yellow Corp. declares bankruptcy after years of financial struggles

Trucking company Yellow Corp. has declared bankruptcy after years of financial struggles and growing debt, marking a significant shift for the U.S. transportation industry and shippers nationwide.

The Chapter 11 bankruptcy, which was filed Sunday, comes just three years after Yellow received $700 million in pandemic-era loans from the federal government. While a Chapter 11 filing is used to restructure debt while operations continue, Yellow, like other trucking companies in recent years, will liquidate and the U.S. will join other creditors unlikely to recover funds extended to the company.

Yellow, formerly known as YRC Worldwide Inc., is one of the nation’s largest less-than-truckload carriers. The Nashville, Tennessee-based company had 30,000 employees across the country, including Long Island facilities in Plainview and Deer Park.  

The Teamsters, which represented Yellow’s 22,000 unionized workers, said last week that the company gave legal notice for a bankruptcy filing and shut down operations in late July following layoffs of hundreds of nonunion employees.

Yellow fell into severe financial stress after a long stretch of poor management and strategic decisions dating back decades.

Kevin McCaffrey, president of Teamsters Local 707 in Hempstead, which represents around 100 Yellow workers on the island, said the union is in the process of helping impacted drivers, dock workers, and clerical workers find employment with other freight carriers in the region.

“It’s an understatement to say they’ve had financial issues,” McCaffrey said. “It started 20 years ago when they tried to build an empire through acquisitions and borrowed money.”

Former Yellow customers and shippers may face higher prices as they take their business to competitors, including FedEx or ABF Freight, experts say — noting Yellow historically offered the cheapest price points in the industry.

“It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” CEO Darren Hawkins said in a news release late Sunday. “For generations, Yellow provided hundreds of thousands of Americans with solid, good-paying jobs and fulfilling careers.”

The Wall Street Journal and FreightWaves reported in late July that the bankruptcy was coming — noting that customers had already started to leave the carrier in large numbers and that the company had stopped freight pickups.

Those reports arrived just days after Yellow averted a strike from the Teamsters amid heated contract negotiations.

Yellow blamed the nine-month talks for the demise of the company, saying it was unable to institute a new business plan to modernize operations and make it more competitive during that time.

In 2020, under the Trump administration, the Treasury Department granted the company a $700 million pandemic-era loan on national security grounds.

A congressional probe recently concluded that the Treasury and Defense departments “made missteps” in the decision and noted that Yellow’s “precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss.”

With Victor Ocasio