Trucker Yellow Prepares to File for Bankruptcy

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Trucking company Yellow is reportedly preparing to file for bankruptcy as customers abandon the freight carrier amid a cash crunch and ongoing union negotiations. The potential bankruptcy filing puts Yellow at risk of liquidation, as it has been losing shipments to other operators due to concerns over potential labor disputes.

hile the company has averted a planned strike by the Teamsters union this week, freight volumes have still dropped significantly. The company is negotiating with the Teamsters for a new contract that would allow Yellow to restructure its operations.

Yellow had previously received a $700 million Covid-19 rescue loan from the US government in 2020, which was later under scrutiny when a congressional probe found that the Treasury Department erred in granting the loan on national-security grounds without meeting the required standards.

With $1.3 billion in debt maturities due next year, Yellow’s liquidity problems have increased as shipping demand declined, affecting freight volumes and rates.

The carrier’s cash holdings decreased significantly, and it sought to lower costs through operational changes, leading to disputes with the Teamsters. If customers continue to pull back from Yellow, other carriers like FedEx Freight, ABF Freight, XPO, and Old Dominion Freight Line may take on the remaining shipments, potentially driving up pricing in the sector.

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