Yellow, one of the largest and oldest U.S. trucking companies, shut down Sunday after succumbing to substantial debt and a lengthy standoff with the International Brotherhood of Teamsters (IBT), according to the Wall Street Journal (WSJ).
The 99-year-old company had more than 12,000 trucks moving freight across the country for Walmart, Amazon and many other small businesses that relied on their Less-Than-Truckload or LTL shipping model, the WSJ reported. Under the LTL model, customers can transport any amount of freight to allow for smaller loads. Yellow employed approximately 30,000 people, including 22,000 IBT employees. Its collapse would be the biggest in the U.S. trucking industry in terms of revenue and jobs, according to the outlet. (RELATED: UPS Avoids Major Strike In New Deal With Union)
MIAMI – JULY 8: A Yellow Corp. truck is seen near its terminal (Photo by Joe Raedle/Getty Images)
Yellow’s financial hardships have compounded this year as shipping demand declined and sent rates falling. Its cash holdings fell to around $100 million in June from $235 million in December, according to the WSJ.
Yellow was about $1.5 billion in debt as of March, including about $729.2 million owed to the federal government, according to Fortune. In 2020, under the Trump administration, the Treasury Department gave Yellow a $700 million pandemic-era loan as part of the COVID-19 rescue plan, citing reasons of national security, the WSJ reported.
A special congressional oversight report recently concluded that the U.S Treasury “made missteps” in their decision to give Yellow the loan, adding that Yellow’s “precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss.”
The company is preparing to file for bankruptcy and is discussing selling off all or parts of the business, according to the outlet.