Trucking giant Yellow collapsed on Sunday, ceasing operations immediately and leaving some 30,000 workers without jobs.
The closure is the biggest in terms of jobs and revenue in the U.S. trucking industry.
The company, which received $700 million in federal COVID relief funds in 2020, is preparing to file for bankruptcy and is in talks to sell off all or parts of the business.
The nearly 100-year-old firm is known for its competitive pricing and has more than 12,000 trucks shipping freight across the US for brands including Walmart and Home Depot.
At this time, it __appears__ that all of Yellow's subsidiaries may be GONE too:
- YRC Freight reflects the Yellow Transportation (founded in 1924 in Oklahoma City, Oklahoma) purchase of and subsequent merger with Roadway (founded in 1930 in Akron, Ohio).
- YRC Freight is the largest subsidiary of Yellow with corporate headquarters in Overland Park, Kan.
- Other Yellow subsidiaries include Reddaway, Holland and New Penn.
HAL TURNER OPINION
I am just guessing, but given the sheer size of Yellow, ad some of its subsidiaries like Roadway and New Penn, this could trigger "supply-chain disruption" that would make COVID look like child's play.
Think about this. Yellow is an LTL carrier. That stands for "Less-Than-Truckoad." They handle things like skids (pallets) of shipments.
They have 12,000 trucks. Each day, each truck handles about ten pick-ups, and ten deliveries. (Average)
That means tomorrow, about 120,000 deliveries -- won't come. Another 120,000 pick-ups, won't be made.
Stores won't get products.
Factories won't get raw materials or parts. They also won't be able to ship finished products out.
Do the math. How long before this becomes an actual catastrophe in the supply chain?
Are there other truckers? Yes. Can they just step-in and take up the slack? NO!
Trucklines must carefully balance their equipment to their actual need. There simply isn't enough capacity within the rest of the system to absorb a sudden change like this.
Moreover, certain truck lines only service certain geographic areas. In some places, where maybe YELLOW was the only carrier, shippers simply may not be able to get a trucker to come to them! No service. At all.
I cannot even begin to guess the impact this is going to have on the US economy and supply chain. And I suspect it will show itself within a matter of days.
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