Yellow, the now-defunct freight company, on Wednesday reported a $69.3 million loss in the first half of 2023, including a $14.7 million loss in the second quarter, the last full quarter of the company's operations.
Yellow employs more than 30,000 people, including 22,000 members of the International Brotherhood of Truck Drivers (IBT) union. For generations, Yellow has provided thousands of Americans with stable, well-paying jobs and fulfilling careers, said Darren Hawkins, CEO of Yellow. People who have worked for a company for 20, 30 or even 40 years are rare, but in Yellow, many people have done it. Yellow's announcement of closure after nearly 100 years in business is deeply regrettable.
Although Yellow does not release operational statistics such as daily tonnage or small truck transportation (LTL), many customers abandoned the company before the truckers' strike threat in July. The strike was averted at the last minute, but after that the Yellow Railway closed its terminals and filed for bankruptcy protection last Sunday. The end came suddenly, but not entirely unaware by shippers.
The company did generate an operating profit of $38.9 million in the second quarter, but those profits were offset by non-operating costs, of which interest expense was $48.3 million. Total revenue fell 21% from a year earlier to $1.13 billion.
Mitchell Walter Mitchell, CEO of Tai Software, which provides transportation management system (TMS) for freight brokers, said that as early as July 3, the volume of yellow freight in our system began to decrease. By July 14 or 15, we saw a 70% to 80% drop in the volume of yellow freight. By July 24, most of Yellow's freight had been cleared from its network.
Cargo previously transported by Yellow's four operating subsidiaries-YRC Freight,Holland,New Penn and Reddaway-was primarily carried by other trucking companies and brokerage firms. The company's subsidiary shipped 50000 shipments per day in 2022, but this year the number was reduced, and its volume was obviously quickly absorbed by large and small competitors.
The sudden shift of cargo business to other airlines has slowly ignited the flame of LTL pricing in the United States. Rates paid by former Yellow customers are reportedly on the rise, while Yellow's collapse is expected to eventually push up average contract LTL rates.
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