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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.
On Sunday, one of the largest Trucking companies in the U.S., Yellow Corp., filed for Chapter 11 bankruptcy, just three year after Yellow received $700 million in pandemic-era loans from the federal government, under the CARES Act signed into law by President Trump. Chapter 11 will allow the company to liquidate, while operations continue, but means that the company is unlikely to recover.
Yellow historically offered the cheapest price points in the industry, according to Insider, pushing prices up as Yellow’s customers find other shipping services.
“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.”
Yellow is one of the largest shipping companies, employing about 30,000 employees nationwide, and has 12,000 trucks on the road.
Yellow blamed their financial troubles on their nine month battle with The Teamsters, which represents 22,000 unionized workers. Yellow recently averted a strike from the Teamsters amid heated contract negotiations
As of March 2023, Yellow had outstanding debt of $1.5 billion, $730 million of that being owed to the federal government, Insider has reported.
The company has been struggling for decades and came close to filing for bankrupcty several times since the 2008 economic collapse.
According to the Wall Street Journal, the company nearly filed for bankruptcy when demand collapsed during the Great Recession, and then again in 2014 and 2020.
The Wall Street Journal has also reported that since 2009, Yellow’s annual revenues have hovered close to $5 billion, but the company has posted losses most years and never a profit above $25 million.