the third largest LTL transportation company and the fifth largest transportation company in the United States, Yellow Corp. It is currently at a critical juncture, and many bad news are coming!
Local time Monday night, Yellow received its YRC Freight and Holland truck drivers to manage health, welfare and pension funds Central States Funds issued a default notice, the notice shows that the company's participation in the pension plan will be terminated on Sunday, Saturday after the medical insurance claims will not be paid;
Local time Tuesday, Yellow received the truck drivers International Federation (International Brotherhood of Teamsters, hereinafter referred to as IBT) issued a strike notice, the notice said that if Yellow does not pay the required amount to the Central States Funds on time, the driver will be the earliest next Monday (24th) to strike;
This is not over. On Wednesday, Yellow's big customer and transportation management provider Uber Freight announced a temporary suspension of its freight service.
Yellow defers employee benefit payments
Last month, One Shipping reported that Yellow Corp. As soon as it runs out of cash in mid-July, the funds run out of it to the union IBT to file a huge claim of more than $0.137 billion!
Central States Funds said in a notice on Monday that Yellow Corp. Refusing to pay the June payment and planning to refuse to pay the July payment, the two payments amount to more than 50 million US dollars.
faced with a notice of default Central States Funds, Yellow Corp. A statement on Tuesday night said it would postpone the required payments for June and July as planned, which could lead to a strike by some truckers union employees.
Yellow wrote in the statement: "The company notified Central States Funds that it will postpone the payment of the June and July medical and pension payments originally scheduled for July 15 and August 15 to maintain liquidity as it works hard to meet with IBT and obtain additional financing."
"The company intends to repay the funds as soon as it receives additional financing and has asked Central States Funds to come together to negotiate acceptable terms."
Yellow also reiterated that so far it has only deferred one of the two payments and will repay them with interest in the future.
A recent filing with the U.S. Securities and Exchange Commission shows that as of June 30, Yellow had more than 0.1 billion U.S. dollars in cash and cash equivalents.
Central States Funds recommends that plan participants have the option of paying for health insurance out of pocket. The notice stated that the cost of medical insurance will be $471.86 per week by July 29, and will increase to $507.08 per week by July 2024.
It is understood that Yellow about half of the truck driver employees have participated in the Central States Funds insurance plan.
Truck drivers may start strike
In the face of Yellow's announcement of the introduction of driver employees to pay welfare payments, the IBT union announced that it would strike as early as next Monday.
Union general chairman Sean O'Brien said: "Yellow has once again failed its workers and continues to neglect its responsibilities."
"After years of worker subsidies, federal loans and other bailouts, this deadbeat company has only itself to blame for being in such an awkward position."
Union general secretary and treasurer Fred Zuckerman said: "Yellow has a responsibility and an obligation to its workers. Our members should not suffer because of Yellow management's incompetent and financially irresponsible behavior."
Faced with drivers' strike warnings, Yellow instead pointed the finger at the IBT union, saying it was responsible for its "inability to pay Central States Funds on time".
Yellow said the request for a deferral of payments was "not unprecedented", but Central States Funds rejected its request despite the fund's reserves being healthy.
"Even more regrettable is that the truckers union president accused Yellow of failing the workers, but in fact it was the union's leadership that failed the 22000 truckers who were employed by Yellow, and 8000 who could soon become truckers union collateral damage non-union employees."
Yellow argues that "the union violated the collective bargaining agreement" causing it to now delay payment.
Last month, Yellow alleged that the IBT union violated its binding union contract by unreasonably blocking a business modernization restructuring plan that was vital to Yellow's survival, "One Yellow", which cost Yellow more than 0.137 billion dollars.
"In short, union leadership's obstruction of One Yellow has directly contributed to Yellow's liquidity crisis and the need to implement cash-saving measures, including its benefit funding extension application," Yellow said.
Uber suspends its partnership with Yellow
It is understood that in addition to facing a potential strike, Yellow has been temporarily removed from some third-party freight platforms, and shippers have been transferring shipments to other carriers.
On Wednesday, Uber Freight a representative to the media confirmed that they have decided to temporarily stop to Yellow to provide freight services.
The spokesperson said: "In order to mitigate the impact on our customers and their logistics, we temporarily suspended Uber's Freight contract bidding with Yellow and quickly shifted capacity in our network to keep goods flowing."
"We will continue to monitor the situation and will make adjustments as needed."
Source: one shipping