Yellow Corp Closes After 99 Years: A History
On Sunday, July 30th, Yellow Corp seemingly ceased all operations in preparation for their 99 year old company to file for bankruptcy in early August. Yellow is the nations 3rd largest LTL carrier with roughly 12,700 tractors, 42,000 trailers, and around 300 facilities in North America.
The History of Yellow
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Roadway Acquisition
In December 2003, Yellow Corporation, the second-largest LTL carrier in the US, bought Roadway Corporation for $1.05 billion. A new holding company, Yellow Roadway Corporation, was formed. This bold move created a major shake-up in the industry, as Yellow Roadway's revenue surged to over $6 billion, leaving competitors like FedEx Freight and Con-way in the dust at around $2 billion. The merger faced scrutiny, but it proved to be a game-changer, redefining the LTL landscape.
USF Acquisition
In 2005, Yellow Roadway acquired the US-based LTL carrier, USF Corp., and its subsidiaries for US$1.5 billion, boosting its revenue to $9.9 billion in 2006. The acquisition led to profit increases from $40 million in 2003 to a high of $288 million in 2005. Yellow Roadway also restructured itself, forming a new subsidiary called YRC Regional Transportation, headquartered in Akron, Ohio. The international market saw expansion in China through strategic investments in Chinese freight-forwarding companies.
YRC Worldwide
In 2006, Yellow Roadway Corp. became YRC Worldwide after its international investments. However, financial troubles led to significant net losses in 2008 and 2009. YRC narrowly avoided bankruptcy by persuading bondholders to exchange their notes for shares. A financial restructuring in 2011 erased shareholder equity, and employees took substantial pay cuts to keep the company afloat. Yellow Transportation and Roadway merged to create YRC Inc. in 2009, and Yellow Canada merged into YRC Reimer. YRC Worldwide sold part of Glen Moore to Celadon in 2011 and rebranded its operations as YRC Freight in 2012.
2020 - Present
In July 2020, the U.S. Department of Treasury announced an emergency loan of $700 million to YRC Worldwide (now Yellow Corporation) under the CARES Act. In exchange, U.S. taxpayers obtained a 29.6 percent equity stake in the company to safeguard public funds. A Congressional report in October 2020 questioned the justification for providing the loan.
In February 2021, YRC Worldwide reverted to the name Yellow Corporation, refocusing on North American LTL operations as part of a larger restructuring plan. The company received a $700 million federal loan during the COVID-19 pandemic in return for a 29.6% stake held by the U.S. Treasury.
Now that leads us to the final chapter of the Yellow Corp saga, as the company starts is chapter 7 liquidity. Over 30,000 employees are now jobless, from truck drivers, to dock workers, and office workers.
Facilities
According to Yellow's annual report for the year-end of 2022, the company was operating a total of 308 transportation service facilities throughout North America. Among these facilities, 166 were owned by Yellow, while the remaining 142 were leased.
The combined number of freight servicing doors across all these facilities was 19,100. The size of these facilities varied, with the smallest having only three freight doors, and the largest boasting 426 doors. The top 10 service facilities, ranked by the number of doors, had a collective total of 2,520 freight doors. Out of these top 10 facilities, seven were owned by Yellow, and three were leased.
According to a report from Stifel analyst, there were perceived opportunities for competitors to upgrade their facilities into larger and more advanced ones. Additionally, well-capitalized LTLs (Less Than Truckload carriers) could potentially acquire terminals as part of their growth strategy.