The US trucking industry was rocked Sunday evening as Yellow Corporation, formerly known as YRC Worldwide Inc., filed for bankruptcy. The Nashville-based company, which was among the nation’s largest medium-capacity trucking companies with 30,000 employees, had received a massive $700 million pandemic-related loan from the federal government, but financial troubles had been mounting for years prior to that.
In the wake of recent congressional investigation findings that denoted errors made in granting Yaml the loan during the pandemic, the federal government is now exposed to significant losses of taxpayer’s funds. With Yellow owing an approximate $1.5 billion, of which $729.2 million was due to the federal government, and only $230 million of which has been paid back thus far, the outlook on what remains of the company is bleak.
The imminent downturn of Yellow Corp.’s business operations has left their former customers to face higher prices at rival deliveries, including FedEx and ABF Freight. Yellow officials have indicated they are working with the federal bankruptcy court in Delaware in hopes to paying out salaries and benefits to their employees, taxes to the government, and other essential suppliers. Bruce Chan of Stifel, a research director, noted that “after all parties have bailed them out so many times, there is limited interest in doing it again.”
Despite receiving billions in support from government and financial institutions, as well as navigating nine months of tense contract negotiations with Teamsters, the organization representing the firm’s 22,000 unionized workers, the company suspended operations late July amid layoffs of hundreds of its non-union employees.
The profound financial burden placed on Yellow has only been exacerbated by the ongoing labor disputes with the Teamsters union. As the disturbing outcome of Yellow Corporation’s mismanaged trajectory reaches its apex, the silver lining light shone rests on the 30,000 members of the Yellow family, who can only hope that the future of the freight industry brings better news.
With information from AP
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