From the Great Recession to 2020, Yellow nearly went bankrupt four times. In each episode, the trucking giant was saved — thanks to concessions from lenders, the Teamsters union, the federal government or often all three.
As a result, some of Yellow’s 30,000 employees weren’t too scared when the company began warning this summer that the end times were coming again. “It’s like crying wolf at this point,” Yellow mechanic Brian Atchely told FreightWaves earlier this month.
Now — as a strike looms, customers begin to pull freight and the Teamsters union refuses to offer concessions — industry watchers are on alert that the trucking fleet may finally shutter. Ahead of a federal court hearing on Friday, Yellow said a work stoppage could force the company into a Chapter 7 liquidation bankruptcy proceeding.
Truck drivers are grappling with the idea that they could lose their jobs. Some 22,000 Teamsters members work at Yellow.
Paul Duquette, who works at the company’s Youngstown, Ohio, terminal, joined Yellow 11 years ago after his previous union trucking employer closed. He told FreightWaves on Friday morning that he and his colleagues are clearing the docks of freight now.
“I don’t see things happening in a good light right now,” Duquette said. “It’s sad.”
Duquette has friends who work at nonunion trucking fleets and bring home a bigger paycheck each week. He said what’s kept him at Yellow over the years is the health insurance.
Central States Pension and Health Funds, which covers about half of Yellow’s Teamster employees, informed them Monday that Yellow missed its June contribution and would withhold its July contribution. If these payments are not cured, employee pension accruals and health care coverage will end Sunday and the Teamsters union has issued a notice that it could strike Monday.
Yellow said it requested a two-month deferral of the contributions last month, with no interruption in employee coverage. The funds denied the request.
“I won’t even complain about the pay, but the health insurance — I can’t work here without that,” Duquette said.
One Yellow truck driver based in Minneapolis said he and his colleagues have felt “a little anxiety and uncertainty” about the company shuttering.
“If there is a strike, the company is likely done,” the Minneapolis truck driver said. “If people pull their freight, we’re going to be in big trouble.”
Another Yellow truck driver in Washington state said his terminal will continue working on Monday as employees there are not covered by the Central States plan. Still, he believes a strike would force the whole company into bankruptcy.
“I put in 23-plus years at this company,” the Washington-based driver said. “I am concerned about having to start over somewhere and relearn something again, but I guess that’s the way it would have to be.”
‘Come Monday, I am the one that loses’
FreightWaves has connected with more than two dozen Yellow employees in the past month as the massive trucker teeters on financial ruin. Many drivers shared that they believed Yellow is poorly managed. Increasingly, some are sharing frustrations that the union didn’t further negotiate with Yellow about its proposed operational changes.
“We are as frustrated as our employees,” a Yellow spokesperson said in a statement on Friday. “Yellow has tried for nine months to meet with IBT leadership to discuss pay increases for our employees and the future of One Yellow. We have made numerous offers over several months to increase wages. The most recent offer included nearly an $11 increase in total compensation over the five year contract, yet the union never brought that offer to its members. That’s the height of irresponsibility, especially when 30,000 jobs are at stake and our union employees pay a combined $15 million in annual dues to an IBT that is not representing their best interests. We continue to do everything we can to fight for our employees’ jobs. We are not giving up.”
A Teamsters representative said the union “will do everything possible to protect and support our members.”
“If there is a shutdown, it will be Yellow Corp.’s own doing,” the spokesperson said in a statement on Friday. “Our members understand this and are furious that the company continues to misguide workers and mismanage this company into the ground. They have put themselves in this position at the expense of thousands of hardworking Teamster families.”
Yellow’s network is currently a mishmash of several trucking fleets it acquired in the early 2000s. Those networks were never fully integrated, and the acquisitions put Yellow in a challenging financial position at the start of the Great Recession. Since 2009, Teamsters has made a slew of concessions to Yellow to keep the company afloat, including allowing the pension to be funded by 25%.
A 2019 labor contract enabled Yellow to consolidate some of those disparate networks in an initiative called One Yellow. Yellow integrated networks in the western U.S. last year. In its next phase of integration, Yellow aims to convert nearly 1,000 truck drivers into a new job called “utility driver”; this may reduce their pay and would substantially change their job duties. To make these changes, Teamsters instructed Yellow to reopen the current contract early and engage in a full collective bargaining process.
The Teamsters union has blocked those consolidation attempts. Yellow claimed that the union’s refusal to continue negotiations on One Yellow changes put the company’s financial future in jeopardy. Teamsters General President Sean O’Brien said on June 12 a Yellow shutdown was “out of our control” and refused to budge on the operational changes.
Yellow filed a $137 million lawsuit against the Teamsters on June 27 for blocking the company’s change of operations. The Teamsters replied in a news release that the union has “diligently adhered to the terms” of its current collective bargaining agreement and that the change of operations that Yellow is requesting would violate that agreement.
Now both Yellow and Teamsters are blaming the other for the fleet’s current financial chaos. One Indiana-based Yellow truck driver told FreightWaves that he finds fault on both sides.
“At the end of the day, come [Monday], I [will] wonder where my next meal is coming from while Yellow and Teamster management get their hefty paychecks and go out to dinner on the sweat and worry of the employees,” he said. “Come Monday, I am the one that loses.”
The job search is already starting for some Yellow truckers
Some are simply taking matters into their own hands and quitting before Yellow can go kaput.
One New York-based driver said he’s in the final rounds of getting hired at another trucking fleet. This one isn’t unionized, but he said he doesn’t mind. “I don’t see the point in being in a union,” he said. “It’s a whole lot of rigamarole for very little return.”
The Washington-based Yellow driver said he’s also looking for work at nonunion fleets. Duquette, the Ohio-based Yellow driver, said he’s been trying to get hired at unionized trucking fleets. However, he said being in his mid-50s has made it challenging to get a new job.
The overall share of unionized LTL trucking fleets has greatly decreased since trucking was deregulated in 1980. Unionized LTL carriers have dropped from claiming 42% market share in 2002 to 22% in 2022, according to numbers from SJ Consulting Group, which advises transportation and logistics firms. Only three unionized LTL carriers remain today: Yellow; ABF Freight; and TForce Freight.
“While some union employees may be able to get other jobs, they are unlikely to find jobs that offer full health care benefits for their families, or that would offer them the same seniority our employees have earned and enjoy today,” a Yellow spokesperson said Friday.
Like other Yellow employees, the New York-based driver said he’s confused how Yellow is already on the brink of bankruptcy after receiving a $700 million federal loan just three years ago.
“I realize that upper management has the attitude that ‘you truckers just don’t understand the nuances and complications of running a successful LTL company’ and, perhaps in some sense, they don’t,” he said. “But in the simplest terms, if you have kids running a lemonade stand and they’re selling lemonade every day and you lend them $700 for lemons and sugar and three years later, they’re broke, what would the common assumption be?”
On the other side of the country, other Yellow employees are quietly leaving too. One clerical employee in the Pacific Northwest, who asked to not have her name published, said several drivers in her terminal have quit in the past month and found new jobs.
“People are scared and they don’t want to stay and wait to see what happens,” she told FreightWaves.
But she said despite the challenges Yellow has seen in recent years, her colleagues have stayed “upbeat.” She said she will stick around at Yellow — and hopes the company stays afloat.
“On the West Coast, we are waiting for improvement,” the clerical employee told FreightWaves. “We want to see the company survive, but we want it to see it be streamlined and profitable.”
Are you a Yellow employee? Email the reporter at rpremack@freightwaves.com with your feedback. And be sure to subscribe to MODES for your weekly transportation news.
The post ‘Big trouble’: Yellow truck drivers ponder next moves amid potential bankruptcy appeared first on FreightWaves.
