Are Louisiana Truckers Affected by 99-Year-Old Trucking Company’s Bankruptcy?
LOUISIANA (KPEL News) - Shreveport, New Orleans, and other Louisiana cities are home to Yellow Roadway Corporation (YRC) local terminals. But its parent company, Yellow, is declaring bankruptcy, which could put the jobs of Louisiana truckers in jeopardy.
The 99-year-old Tennessee-based company told customers it was stopping its services as of midday Sunday.
On Monday, the Teamsters Union said it was alerted that the company was filing for bankruptcy, sending shockwaves through the industry.
It would be the biggest collapse in terms of revenue and jobs for the fickle U.S. trucking industry, though customers say disruptions should be limited. Many shifted their cargoes to rivals in recent weeks, hastening Yellow’s demise. Competitors said their volumes jumped last week.
“Teamsters have kept this company afloat for more than a decade through billions of dollars in wage, pension and work-rule concessions,” a union spokesman said. “Yellow couldn’t manage itself, and it wasn’t up to Teamsters to do it for them.”
Since 2021 Yellow has pursued a cost-cutting and integration plan that executives said would improve the business. A spokeswoman for Yellow said it hasn’t asked the union for concessions in its recent restructuring. “Yellow offered to pay its employees more,” she said. The union “refused to negotiate for nine months.”
Complicating matters is the fact that the company received a massive loan during the Trump administration, totaling about $700 million during the COVID-19 pandemic. As of March of this year, Yellow had a massive debt of about $1.5 billion. Just over $700 million was owed to the federal government.
Yellow accounts for Its subsidiary, YRC, has five terminals in Louisiana: Alexandria, Baton Rouge, Monroe, New Orleans, and Shreveport.
Louisiana is home to more than 20,000 truckers, according to the Bureau of Labor Statistics.
While Yellow represented just a fraction of the trucking industry, their business model had utilized LTL shipping, meaning a supplier didn't need to fill a truck in order to use Yellow's services. Yellow allowed mixed shipments in order to expand their reach and customer base, though in recent years that did not help what was seen as a series of financial missteps.
There could be an impact felt on the Louisiana trucking industry, as well as the industry overall.
Currently, the number of truckers leaving the industry is greater than the number coming in. An official industry report in 2021 stated that the national industry will need to recruit 1 million new drivers to replace those leaving the workforce. Labor shortages and supply chain issues have plagued the trucking industry harder than most.