What Happened to Yellow Freight?
Yellow Freight (Yellow Corporation), also known simply as the Yellow Truck Company, was once one of the most recognizable names in the yellow trucking industry. Founded nearly a century ago, Yellow was a powerhouse in the less-than-truckload (LTL) business, hauling freight for thousands of customers across North America. But in 2023, the company shocked the industry by filing for bankruptcy and closing its doors for good. This collapse left customers scrambling for new carriers and put more than 30,000 employees out of work - making it one of the most significant shutdowns the trucking world has seen in decades. Here’s the full story of what went wrong and why it matters.
Why Did Yellow Go Bankrupt?
Yellow Corporation had been struggling for years before its eventual collapse. It carried too much debt, mostly due to acquisitions like Roadway and USF in the early 2000s. These were bold moves meant to grow the company, but they created long-term financial problems. The cultures and IT systems of these companies never fully meshed, resulting in constant cash flow headaches and years of unprofitable rates that ate into margins.
Compounding the company’s struggles was a tense and long-running union standoff with the Teamsters. Yellow’s workforce was highly unionized, and repeated attempts to reorganize operations under a plan called “One Yellow” hit roadblocks. The Teamsters rejected several of the company’s proposed changes, arguing that they weren’t in the best interest of drivers. These tensions damaged trust and morale, making it difficult for Yellow to pivot its business model or modernize its aging terminals and equipment.
$700 Million Federal Loan
As if those troubles weren’t enough, Yellow’s financial woes deepened during the pandemic. In 2020, it secured a $700 million federal loan as part of the CARES Act, with the U.S. Treasury acquiring a nearly 30% stake in the company. This loan was controversial from the start, with many in the trucking industry and even Congress questioning whether Yellow was truly “essential” or capable of turning around. Much of the money was immediately swallowed up by existing debt payments and interest obligations, leaving little left to address deeper structural problems.
Market Changes and Rising Costs
Meanwhile, Yellow Trucking was facing stiff competition from other carriers who moved faster and embraced new technology more easily. On top of that, increasing fuel prices and operating expenses put further pressure on the company’s already-thin margins. The economy began to slow as well, cutting into shipping volumes. All of these factors created a perfect storm that Yellow simply couldn’t survive.
Pension Obligations and Debt Load
By the time Yellow Freight closing became inevitable, the company owed more than $1.3 billion in debt - including substantial liabilities to its employee pension funds. Under bankruptcy law, those pension obligations and other secured debts took top priority, leaving many vendors and smaller creditors empty-handed. The years of disputes with the Teamsters didn’t help either; morale was shattered, and many key investments were put on hold as leadership and labor fought one another instead of adapting to the changing logistics landscape.
Final Words
As the dust settles and the company’s terminals, trucks, and other assets are auctioned off, Yellow Freight’s closing is a reminder that even the giants of trucking can struggle if they don’t adapt. The story of this Yellow Truck Company proves that success in the competitive world of yellow trucking requires more than just size; it demands the ability to innovate, collaborate, and look to the future.