Less-than-truckload carrier Yellow Corp. ceased all operations at 12 p.m. Sunday, according to a notice on the gates at its terminals.
Separate internal documents showed the procedures for closing the facilities as well as “talking points” to be used when informing union employees not to show up for their shifts. The documents indicated the company plans to issue a public statement Monday updating “the state of the company and the operation.”
On Friday, Yellow (NASDAQ: YELL) laid off most of its nonunion employees in areas like customer service, information technology and sales. The company stopped making pickups earlier in the week and has been delivering the remaining freight in its network ahead of what appears to be a permanent closure.
After months of negotiations with its Teamsters workforce, the carrier has been unable to reach terms over proposed operational changes it has said were required for its survival. In a breach of contract lawsuit filed last month regarding the matter, the company said it could be out of cash as soon as mid-July.
Most are expecting Yellow to announce it will file for bankruptcy Monday.
Representatives from Yellow had not commented by the time of this publication.
It’s the end of the road for one of the nation’s largest freight carriers.
Yellow, a trucking company that just three years ago took a $700 million federal pandemic loan, is shutting down, according to the Teamsters union, which represents the company’s 22,000 unionized workers.
The company is expected to file for bankruptcy as soon as Monday, according to industry experts, following a recent exodus of customers amid union strife and on top of years of financial troubles.
With 30,000 jobs at stake, it’s poised to be the largest trucking bankruptcy in the history of the U.S., experts said. The company, formerly known as YRC Worldwide, is the third largest less-than-truckload carrier by revenue, behind FedEx and Old Dominion. LTL companies move pallet-sized shipments — smaller than a container, but bigger than a parcel.
Yellow has not publicly announced any plans for bankruptcy or a potential shutdown.
Here’s what we know.
Employees were told to prepare for a company shutdown
The Teamsters union, which had been locked in contentious negotiations for a new contract with Yellow, said it received a legal notice that Yellow is ceasing operations and filing for bankruptcy, according to a news release posted Sunday night.
“Today’s news is unfortunate but not surprising,” said Teamsters General President Sean O’Brien. “This is a sad day for workers and the American freight industry.”
Yellow laid off an unknown number of its employees on Friday, reported FreightWaves, citing a memo sent to staff informing them that the company is “shutting down its regular operations” and “laying off employees at all of its locations.”
The same day, Teamsters had advised Yellow employees to “prepare for the worst.”
“Yellow appears to be headed to a complete shutdown within the next few days,” said Teamsters National Freight Director John Murphy in a Friday memo shared with NPR.
A strike threat delivered the final blow to cash-poor Yellow
The shutdown comes justdays after a Teamsters strike at the company was averted. A week ago, a pension fund agreed to extend health benefits for workers at two Yellow operating companies after the carrier missed its $50 million benefits payment to the fund on July 15, the union said.