Yellow files for bankruptcy, closing after nearly 100 years

In August 2023, Yellow Corp., one of the largest less-than-truckload networks in North America, filed for Chapter 11 bankruptcy protection to wind down its operations. The company and some of its subsidiaries filed voluntary petitions on Aug. 6 in the U.S. Bankruptcy Court for the District of Delaware.

Yellow, based in Nashville, Tennessee, was the holding company for LTL brands including Holland, New Penn, Reddaway and YRC Freight, as well as Yellow Logistics. It said it had 30,000 employees, union and non-union.

The company's account

"It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business," CEO Darren Hawkins said.

The company blamed leaders of the International Brotherhood of Teamsters. It said it had developed a "One Yellow" plan to modernize operations and compete with non-union carriers. Union leadership approved the first phase in the western U.S. in August 2022, but Yellow said the union then blocked the rest of the plan for nine months.

Yellow said its losses from the delay had reached more than $137 million in adjusted EBITDA by summer, and that it sued the union on June 26, 2023, for breach of contract. It said the dispute strained its cash flow and its ability to refinance debt, and that after union leaders announced a strike, customers left and the business could not recover.

Hawkins said employees had worked to "clear the docks, deliver remaining freight, and close our terminal doors one last time."

The wind-down

Yellow said it expected to enter into a debtor-in-possession financing facility that, once approved by the court, would provide liquidity during a marketing and sale process, including payment of some pre-petition wages. It asked the court for permission to keep paying certain obligations, including employee wages and benefits, taxes and some vendors.

The company said it intended to maximize recoveries for creditors and pay back its CARES Act loan in full.

What it meant for carriers

Yellow said customers had fled after the union announced a strike, and that its employees delivered the remaining freight before the terminals closed. The company said it had partnered with the American Trucking Associations on a searchable job database so that ATA member companies could connect with its former freight and operations professionals, mechanics and logistics staff.