Yellow Bankrupt Road: How The 99-Year-Old Trucking Company Ended Up Filing For Bankruptcy
After nearly a century in operation, the storied trucking enterprise, Yellow Corp. (NASDAQ: YELL) has made the painful decision to file for bankruptcy and shut down its operations. The venerable Nashville, Tennessee-based company, which boasts a 99-year legacy, has fallen victim to an overwhelming accumulation of debt, exacerbated by a government loan and a prolonged standoff with the Teamsters union.
Yellow’s bankruptcy marks the culmination of years of adversity, as the company grappled with the financial aftermath of a series of mergers and a substantial $700 million federal COVID-19 relief loan procured during the pandemic. On July 30th, the firm was compelled to cease operations, resulting in a substantial layoff of its workforce.
“It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” said Yellow’s Chief Executive Officer, Darren Hawkins. “Today, it is not common for someone to work at one company for 20, 30, or even 40 years, yet many at Yellow did.”
The announcement of Chapter 11 bankruptcy protection was delivered following the filing that took place late on Sunday, within the confines of the U.S. Bankruptcy Court in Delaware.
The closure translates into the loss of a staggering 30,000 jobs, including a significant 22,000 positions held by members of the International Brotherhood of Teamsters. In an effort to address this upheaval, the company has outlined plans to seek authorization from the bankruptcy court for the disbursement of payments, encompassing wages, salaries, and benefits.
To navigate its passage through Chapter 11, Yellow has orchestrated a loan arrangement, which also encompasses asset sales. The company owns a fleet of approximately 12,000 trucks and operates numerous freight terminals spanning the nation.
Among the 30 unsecured creditors listed in Yellow’s bankruptcy filing are recognizable names such as BNSF Railway, Amazon.com, and Home Depot.
The company’s downfall carries broader implications, particularly for the Central States Pension Fund – a multiemployer pension fund that previously received a federal bailout to prop up near-insolvent retirement plans.
Following the news, the company’s shares fell more than 45% in pre-market trading, contrasted by the recent jump in valuation after news of a possible bankruptcy filing was still in the works.

Nearly a century
Yellow had established a reputation for its cost-effective services, diligently ferrying freight across the country for major retailers such as Walmart and Home Depot, as well as smaller enterprises.
Founded in 1924, Yellow Corp. initially operated primarily under the moniker Yellow Freight. During its inception, the company emerged as a significant force in the “less-than-truckload” (LTL) segment of the trucking industry, specializing in transporting freight that was pallet-sized. Together with two fellow unionized LTL competitors, Roadway and Consolidated Freight, Yellow constituted what became known as “the Big Three.”
However, the landscape of trucking transformed with the deregulation of the industry in 1984. This shift led to intensified competition for the Big Three and other unionized LTL carriers from nonunion counterparts. The fallout from these changes eventually led to the closure of Consolidated in 2002.
In the face of this evolving environment, Yellow Corp.’s trucks now sit motionless at a Hayward, California facility, emblematic of the company’s imminent shutdown on the brink of financial insolvency.
While nonunion LTL carriers began with a notable cost advantage, persistent concessions made by the Teamsters union served to narrow this disparity. The situation was further impacted by a nationwide shortage of drivers, which contributed to wage increases among nonunion carriers.
Despite its successful acquisition of competitors in years past, securing concessions from unions over the past 15 years, and availing itself of a government bailout in 2020, the company’s fiscal trajectory plummeted this year. This downturn was fueled by both a decline in shipping demand and a contentious operational restructuring initiative that culminated in a showdown with the Teamsters union.
The early 2000s saw Yellow embarking on ambitious acquisitions, though challenges arose as integration efforts lagged. The specter of bankruptcy loomed on multiple occasions over the last two decades. A pivotal moment came in 2010, when the Teamsters agreed to concessions in compensation and benefits, averting a prior bankruptcy threat.
This year, Yellow encountered an impasse as the Teamsters effectively blocked the company’s proposed operational revamp, leading to client losses and impeding efforts to refinance around $1.3 billion in debt, maturing in 2024. As the company’s cash flow dwindled, it engaged the services of an investment bank to confront imminent debt maturities. By the end of the first quarter, Yellow owed approximately $700 million to the federal government and over $500 million to private-equity firm Apollo Global Management.
Attributing the company’s failure to the union’s actions, Hawkins pointed to “nine months of union intransigence, bullying, and deliberately destructive tactics.”
The Teamsters, on the other hand, asserted that they had played a crucial role in supporting the company over the past decade through substantial concessions. They remarked, “Yellow couldn’t manage itself, and it wasn’t up to the Teamsters to do it for them.”
In its final operational year, Yellow retained a notable presence, though its once-dominant position had waned. According to trucking consultant Satish Jindel, the company oversaw only about 7% of the nation’s 720,000 daily LTL shipments in 2022.
Historically, bankruptcy proceedings within the trucking industry have frequently culminated in liquidations, despite many companies pursuing Chapter 11 protection with the aim of preserving their operational continuity.
The last instances of major trucking companies faltering occurred in 2019, with both Celadon, a truckload operator, and New England Motor Freight, a less-than-truckload carrier, filing for Chapter 11 and ultimately liquidating. Within such filings, industry insiders explain that the underlying strategy is often aimed at retaining a degree of control over the disposal of assets, which would otherwise be lost in a Chapter 7 liquidation process.
Information for this briefing was found via The Wall Street Journal, CNN, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.