Yellow: Inside American Trucking’s Largest Bankruptcy | WSJ What Went Wrong

Yellow is one of the oldest and biggest trucking companies in the U.S., but it collapsed in late July after years of ballooning debt and a standoff with the Teamsters union. The freight carrier company filed for bankruptcy after 99 years in business. But what events led to the freight company’s downfall?
WSJ explains the factors that helped drive the 99-year-old trucking giant’s growth and details the factors that have led Yellow to face bankruptcy.
0:00 Yellow’s struggles
0:48 Yellow’s background
1:58 Merger mistakes and stalled profits
4:11 Covid government bailout
5:03 Compounding factors
7:03 What’s next?
What Went Wrong explores the challenging conditions and decisions that led to a company's downturn.
#Trucking #Transportation #WSJ

[@wouldntyouliketoknow9891]

I ran a business (albeit a much smaller one) where my primary strategy was low cost. I eventually went out of business too. Low cost is NEVER a winning strategy. Compete on service, compete on product quality, compete on added value, but never try to compete on low cost.

[@zvonemane2534]

Agree. But what would be the added value in trucking industry? Except self driving trucks which is exoensive and still risky?

[@wouldntyouliketoknow9891]

@@zvonemane2534 self driving trucks dont add any value. The load being transported from origin to destination is already expected. Unless self driving makes that happen faster or better, the details of the driving situation doesn't add value. A better example of adding value in trucking would be a load crating/palleting service, or expedited delivery, or load handling services, etc.

[@bertgrau3934]

​@@zvonemane2534 That's one place the teamsters refuse , no auto driving trucks.

[@bertgrau3934]

​@@wouldntyouliketoknow9891 That's where you're incorrect, a self driving truck doesn't need a driver, therefore, it saves the company money thus adding value.

[@wouldntyouliketoknow9891]

@@bertgrau3934 To the trucking company, not to the customer. When we say compete on value added products and services, we are talking about from the customer's point of view.

[@gotwalk]

A board of directors grotesquely failed this company. All executives and board of directors needed to be turned over after 1st acquisition.

[@ElectricVehiclesAreGoodF-ti7xd]

Top heads kept the 700 Million bailout and retired on it. Manipulated the books

[@user-gz8bq7wr7i]

We also have to add the minor role the corrupt Teamsters played in destroying these workers lives.

[@allenatkins2263]

They should have put Hunter on the board and they would be fine now.

[@samsonsoturian6013]

Quit assigning blame

[@Urziel99]

@@user-gz8bq7wr7i So it's corrupt to stand up for your members when they've been lied to for 14 years? Typical right wing hack.

[@DushevnaSepsa]

As someone working in trucking for 4-5 years, many, maaaany small companies are going under and its getting worse.

[@fauxque5057]

Bidenomics. And his regulations.

[@gotwalk]

You should have been around in the chaotic Reagan union busting years watching truckers go out of business daily. Horrible event watching truckers go independent taking on debt then working endlessly not making a living.

[@mgp870]

@@gotwalk my father owned his own truck during the Reagan presidency. He was leased to Bekins Van Lines out of Hillside Illinois. My father owned the truck and pulled their trailer. Ran 48 states and Canada. He supported a wife and three kids. We lived in Los Angeles CA. My two sisters went to college. One attended UCLA and the other Fresno St. We did just fine. My father retired at the age of 63. Yes my mother did work part time. I never went to college. That was my choice. I worked in manufacturing and that was a union shop. The company was Price Pfister located in Pacoima CA. We made faucets for the kitchen, bathroom and shower. Union work wasn't for me. If I had a dollar for every time I heard phrase I PAYED MY DUES. I would be a rich man. Eventually I became a Locksmith and I like my job.

[@piglet7943]

@@mgp870at the end of the day it was the unions who gave us workers a lot of the rights that we enjoy today. I’ve worked non Union my entire life but understand the contributions that unions have done for workers. You can work independently or union if you choose but I don’t like union busters. Those people are for profits over people.

[@omegamanxxx]

@@fauxque5057 Nonsense... sounds like they made too many acquisitions then got hit by the financial collapse. This is not political so why make it one.

[@takehandleandshoveuparse]

Their sign said yellow but it was ORANGE. Who would confidently invest in a company that was color-blind?

[@user-fb4zo8wd5n]

Well, the yellow traffic light is orange to me.

[@412hwc]

😂😂😂 best comment ever

[@followerofjesuschrist.]

"From that time Jesus began to preach, and to say, Repent: for the kingdom of heaven is at hand." Matthew 4:17 "Ye have heard that it hath been said, An eye for an eye, and a tooth for a tooth: But I say unto you, That ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other also." Matthew 5:38-39 "And when thou prayest, thou shalt not be as the hypocrites are: for they love to pray standing in the synagogues and in the corners of the streets, that they may be seen of men. Verily I say unto you, They have their reward. But thou, when thou prayest, enter into thy closet, and when thou hast shut thy door, pray to thy Father which is in secret; and thy Father which seeth in secret shall reward thee openly." Matthew 6:5-6|

[@TheNippoo]

im so sick of this overused joke.

[@StonesAndSand]

Finally...this was what I was looking for!

[@deeharp]

Expect many more American Companies, that have done the same thing just like many that have already collapsed. They stopped being in the actual business of trucking and got into the business of growth. Growth allows them to inflate numbers make the stock price go up and let the shareholders cash out and let the company die slow. While everyone acts shocked that it happened. The people in Charge got rich and everyone else got a pat on the back. So many more to come.

[@combatvolta]

You said it all ,that was the reason

[@spechund7109]

And F unions. I hope all union related industries go out of business.

[@darrylturner2611]

Yellow received $700 million in PPE money, what did they do with the cash?

[@creekwalker62]

Greed, it's always about the insatiable greed and the golden parachutes.

[@arthursmith8771]

@@spechund7109 Troll alert!

[@cheesemaster113]

RIP to all the honest hardworking truckers who lost their pensions

[@Vizzi12]

A huge chunk of them are actually protected, their pensions were sold to a managing firm

[@johnblanton2522]

The pension is not tied to the company. Pension funds are separate. They can go to work at Abf and keep growing the contribution.

[@mattstaebel3543]

What about the hard working office employees?

[@Vizzi12]

@@johnblanton2522 not always, some companies manage pensions internally, yellow did

[@alexrebmann1253]

@@johnblanton2522 What is sad about the pension is that Yellow stopped contributing in 2009. What did they do with all that money, plus 15% pay cut, and 1 week paid vacation pay that teamster gave up to help the company.

[@HungerSTR1KE]

This is absolutely ridiculous. A year ago all you could read was headline after headline about how there weren't enough truck drivers and how much freight was being left at docks and without transportation to its final destination. Now the 4th largest LTL company can't run itself well and files for bankruptcy because not even the deep concessions the Teamsters made are enough to keep it running. This sounds like a business poorly run for many, many years. We don't have a "labor shortage" we have a shortage of well run companies that pay a living wage and follow labor laws. There never was a labor shortage, just an over-abundance of greed-driven executives willing to slash at labor until it's not worth it to work the jobs they offer.

[@hydrocarbon8272]

And yet, these failing companies are being run by people making millions per year. More in a year than any of their workers will get from the company in a lifetime. "Opps, my bad! I guess I'll use my mountain of cash to take a long vacation while I find another business to trash." -execs, usually

[@Djamonja]

You should start a well run trucking company then if you think it's so easy?

[@bigbubba4314]

It sure sounds like a simple thing to run a profitable company. I’m shocked that no one on the leadership team of the Teamsters has opted to start their own trucking company and provide reliable, good paying jobs to all of the Teamsters.

[@williambrandondavis6897]

There is a labor shortage. We have plenty of people to do the work. The problem is most of those workers are not good employees. What one guy in 1950 could do in 8 hours now takes 4 people. It's because people have become too privileged and lazy. Production efficiency is at an all time low. Workers today lack the discipline and commitment. Your average worker doesn't even keep a job for more than a year at a time these days. That's pathetic. Try running a business and see how your perspective changes.

[@nick1801]

@@bigbubba4314 Union members are notorious for having access to vast amounts of personal capital and/or access to capital markets 🤣

[@jeffbutterfield241]

This is very reminiscent of the collapse of Consolidated Freightways in 2002.

[@petergray2712]

Kinda. But there was a lot more management skullduggery in that case. Ownership and management had already set up a non-union company (Con-Way) in anticipation of Consolidated's collapse, meaning that they deliberately ran that company off the cliff.

[@jeffbutterfield241]

@@petergray2712 That's one way to look at it. However, Consolidated Freightways had been spun off 6 years on it's own without debt, while (Con-Way) took the massive pile of debt that had been amassed between 1990-1996 from the acquistion of Emery. I put more blame of CF's demise squarely on the Board of Directors for not recognizing that it was in trouble sooner.

[@bertgrau3934]

​@@jeffbutterfield241 I disagree, the management at CF didn't like the Teamsters. Like another gentleman said, they started Con-Way to takevover the hauling business and get rid of the union. It worked.

[@Brett636]

As an outsider watching this train wreck I found this video to be spot on. As always the buck stops at the top and those at the head of this company made poor decision after poor decision and it took 20 years, but the inevitable finally occurred. My condolences to those unemployed due too this mess.

[@thomasgirty6397]

Sooooo , the union had NO input for those 20 yrs??? ill bet the dues were never missed. blame ALL THE SUITS WHO DONT REALLY CARE ABOUT THE GUYS WORKING.

[@bertgrau3934]

One thing not mentioned, how many seen the wreck coming and bailed before it went out of business? I know of at least 200 drivers, and no one else was smart enough to see that mess coming?

[@supchief9]

@@thomasgirty6397 One COO pay went from $300k in 2020 to $5.3 million in 2021. The CEO pay increased around $800k - not to mention he has sold about 60% of his stock since 2014. They want EVERYONE to blame the unions while not looking at the top executives pay.

[@beepboopbeepp]

@@thomasgirty6397 nothing is black or white, but those major acquisition is clearly what killed the company. Not the unions. They bit off more then they could chew while also not changing their businessmodel

[@jerryjones4971]

They are greedy and employees pay the price.

[@samuelross9884]

I blame the company. They clearly did not manage the company well.

[@CBrown]

You have to blame decades of management, most of which left the company years ago. Current management was doing everything in it's power to correct the inefficiencies that their predecessors left behind and were the cause of the cash bleed. Of course they weren't perfect but the IBT was so angry about the past that they blocked almost all efforts to make things better at the expense of their drivers. Here's an undisputable fact: If the IBT had accepted any deal, those drivers would still be working today but they preferred to let the company die, simply because they could, rather than accepting even any offer to keep 30,000 people employed. Regardless of how you feel about Yellow or the executives, help me understand the logic there? Because even if the only offer was yet another "compromise" as O'Brien puts it, when the other option is all of your people lose their jobs, what reason do you have to decline it? Those drivers could still leave the company if they so chose if they didn't like the deal. As it stands now, they have nothing and many of them are very upset about the situation, especially because it's not likely that they'll find new union jobs, that pay as well, or offer the same benefits. Everyone lost here, including you and me as taxpayers. Had the IBT simply accepted something and let Yellow try, at least these guys would have another year of employment, Yellow would be able to pay back at lease some of the loan they got, and it's at least possible the proposed changes that the IBT was so against would have solved the financial woes. This was dumb. If you disagree, please, explain the logic behind the IBT's decision to just let a company die and 30,000 people lose their jobs when all they had to do was sign a contract where they'd get something rather than nothing.

[@samuelross9884]

@@CBrown I assume the IBT assumed that the driver's would collect unemployment for a while and find work at a more lucrative carrier at a higher rate. The assumption is logical.

[@fauxque5057]

I blame the Union

[@gotwalk]

The operations were poorly organized and run. Wonder how many of those execs own luxury 2nd and 3rd homes in Florida and/or Arizona.

[@gotwalk]

​@@fauxque5057troll?

[@cessna172ident]

I’ll miss seeing Yellow and YRC trucks at the place I work at. Used them many times to ship ground freight throughout the country and never had a problem.

[@PirateD.KingLuffy]

I would see them at my job a few months ago and summer came and never saw them again🤷🏿‍♂️

[@edwardgaines6561]

The Unions are to blame here.

[@charlesgale4257]

Never had any experience with them but they always drove safely when I saw them on the highway.

[@mikemccarthy6939]

@@edwardgaines6561 negative the unions have given several concessions over the years this was and is a upper management problem

[@Urziel99]

@@edwardgaines6561 NO they aren't, you're just programmed by Fox news to hate workers standing up for themselves. But hey, maybe you are okay with being led to for 14 years about getting concessions you made in 2009 back and it not happening despite the 700 million dollar bailout Jared Kushner arranged for them.

[@bronxtaskforce01]

The federal government needs to investigate where all that money went. Where did people's retirement funds go?

[@gund89123]

PPP loans were all scam. Initially there were strict conditions on who gets the loans, but congress watered them down so that they can distribute the money.

[@ronblack7870]

paying wages

[@PirateD.KingLuffy]

Bruh it’s not rocket science. Those higher executives took most of the money that wasn’t debt

[@FreeHat]

They still have their retirement funds. It didn't go anywhere. Yellow did not control pension funds, they just paid into the accounts.

[@johnnycab8986]

Probably the Union heads ran off with it.

[@quilino59]

I was a truck driver for New Penn Motor Express, one of the best local carrier on the North-east, until YRC took over, every thing went downhill, been in the union for so many years I had no choice but to stick around working for 15% reduction of my income for 14 years, finally on march 2022 I took early retirement which I don't regret I'm doing better than before no pressures of been a slave for monopoly corporations.

[@michaelgoodwin1351]

Same over at Reddaway.

[@oby-1607]

I worked for a company that got top heavy and ignored the people that got them there. The workers. Today, the company doesn't exist and the hole left behind them was quickly filled by their competitors. Companies have to work as a unit, and not as if by some crown looking down on its workers. There's always a price for that.

[@HUMPFunkWorthy]

I was a dock worker for Yellow. Completely mismanaged, huge corporate bonuses, huge corporate salaries. They would fly me to other states, pay me per diem, put me up in hotels, pay for stake dinners… because they couldn’t hire anybody on. Because of management’s perspective towards organized employees. Long live the Teamstersz

[@billyblackmon4796]

the leaders at Roadway were very smart selling to Yellow, forming Roadway Package System, selling that to Fed Ex.

[@HerbertAtkinson]

Being a retired roadway express guy not seeing any roadway yellow trucks & trailers on the road now reminds me of when CF went under it's a very odd feeling.

[@jeffbutterfield241]

I was just commenting above about how this reminds me of that. I was an employee at CF when it went under working at the Vancouver headquarters. My dad worked there for 30 years, started months before I was born and I was there when it went under. Broke my heart.

[@vicpetrishak7705]

Pacific Intermountaim Express and Spector were also good solvent carriers at one time ! And not let us forget Monfort !

[@phillyphil1513]

here in the Northeast: Jevic then New Century (2 inter-related companies).

[@DotADBX]

why they didn't just sell off assets after the crash is beyond me, they should have aggressively downsized till the market corrected.

[@westsacramentowastetrucks5386]

No one at Yellow Corporate was that smart sadly, they didn’t exactly care where the business went. Especially with the high dollar bailouts they’ve received that would’ve definitely saved them had they not taken MASSIVE bonuses.

[@arthurtomczak8474]

Just wasted money on small depot in St. George Utah . Finished in time to lock the gates .

[@jmd1743]

@@westsacramentowastetrucks5386 Demise of Yellow reminds of the collapse of many former retailer stores that built too many locations.

[@Xeonerable]

In American capitalism intentional downsizing is basically a sin, if its not growth growth growth all the time then you may as well not exist in their eyes.

[@DotADBX]

@Xeonerable it's called strategic downsizing and yes it May be a sin but sometimes u gotta cut off the arm to save the body

[@red---paulvanravenswaay2247]

"When things dont make sense, theres usually a reason.......and its usually not a good one" The infamous Bob Allen.

[@HevyDuty2ok]

Yellow has a bunch of bankers running it! They had no business buying Roadway, Holland, Preston, or another company! What they needed to do is run their own business and make money for all involved including the drivers! Instead the banker they hired to bankrupt all these other companies lost the business for their company! I remember many of my customers telling me they would never use Yellow again and there you have the moral of the story! Keep you nose out of other peoples business!!

[@rjuhl2007]

Had a couple of Yellow trucks on the yard at work to come through the shop. Then they got towed away, we scratched our heads but now we know why.

[@jjthefed]

lol Maybe they were taking them in to actually paint them yellow.

[@angelgjr1999]

I’ve seen yellow trailers dumped on the side of the highway 😅

[@Shane-en2sq]

Offered to pay its employees more, blatant lie. Attending the local company meeting, their proposal would have resulted in a 30% pay cut, by reducing my miles. When was the last time you heard anybody taking a 30% pay decrease in any profession?

[@bngr_bngr]

Yet now you lost your job.

[@02nupe]

@@bngr_bngr you still didn't answer the question....#deflecting

[@solosix3991]

​@@02nupe[nupe nupe] Of course he is. I can guess how he votes too. It's always the working guy's fault and never the company that got bailed out, subsidized and negotiated with (through the unions of all people), and STILL ran the company into the ground

[@bngr_bngr]

@@02nupe what question?

[@mr.stonerUDX714]

every day

[@kingloc6042]

Could it be an aggressive corporate strategy to clean house, change the name, mortgage the brand to pay the debt, and start fresh without union employees? 🤷🏾 That has happened before too.

[@kingloc6042]

Freight rates will increase because of this. I just want to know where the trump bailout money went. $708m is a lot.

[@phildirt3]

See CF

[@RuStOlIuM420]

Yes

[@samsonsoturian6013]

Why not? Screw Unions.

[@phillyphil1513]

A: no. because: "Occam's Razor"... All things being equal, the simplest answer tends to be the correct one.

[@GH-oi2jf]

So overexpansion killed the company. Greed. Management wasn’t satisfied to be just one of a few large trucking companies. They wanted to be the biggest, which they could only be by swallowing the competition. Stupidity. Some people automatically blame unions for business failures, when it is usually poor management.

[@darrylturner2611]

This is a very intelligent point!!

[@dfor]

It wasn’t exactly overexpansion. The leader in the LTL industry is FedEx Freight which has been running 15-30% profit margins and expanding like crazy for years and is still making tons of money in its LTL division. But they actually charge what it costs to be profitable. Unlike YRC. Their biggest problem was that they had a reputation for being a low cost carrier which also had a low value of service. They were slow, and much more likely to damage your freight. But that’s the risk you take paying half as much for your freight to move. And as such they could never justifiably raise their prices. All that and other companies paid their workers a lot more than YRC and their subsidiaries ever did. Old Dominion and FXF have their top pay rates nearly 30% higher than USF paid, and 20% higher than Yellow. Yet they were still profitable while yellow failed. With that it’s obviously not the unions fault when they don’t even make as much as the non union shops. It was entirely the yellow business model that screwed themselves.

[@mikerundle8188]

Yellow, a badly managed company, buying its larger competitor...what could possibly go wrong?

[@g600f700]

It's easy. Get Yellow's balance sheet for the past 20 years, look at which team makes money, which team burns money and check their trends/patterns. If the CEO or leadership is to blame, get rid of them asap. After a few changes in leadership and the business is still not improving, maybe it's not the leadership, something else. It's the same principle running financial planning in other successful business.

[@samsonsoturian6013]

Come now. Thousands of companies take lots of risks like this but we're only angry at the ones that lay people off

[@highwayred480]

I remember when yellow bought roadway and the news made me sick 😫 then when they bought Holland I knew then they would file for bankruptcy to kill Union membership like they wanted to in 1994

[@jimlong8077]

As a broker when I need cheap LTL I could always get a better rate than Yellow. When I need quality service I could always do better than Yellow. Long hold times and poor service. Theyve been on my "do not use" list since 2020. It is what it is. And I hate it for seeing their brand since I was a kid watching big trucks roll by from the day-care.

[@bcalm22]

How can i get in touch with you ?

[@nileshalinger]

you sir no longer have that problem - sleep well

[@huckfin1598]

@@nileshalingerneither do the union employees. They don’t have to complain and demand anything. They’re all unemployed!

[@killer2600]

@@huckfin1598 It appears to be what the union wanted; Resign or get laid off they both leave you unemployed.

[@carterburpee8499]

They were an absolute logistics nightmare for the company I work for. Every time we used them the truck was always late by weeks. Cannot say I'm sad to see them go, but I feel for all the guys who lost their living. Hopefully they can move on to better companies that'll treat them right.

[@lih-fk8by]

The real problem is letting all these private companies grow to the point that they become the public's problem when they fail

[@randyosborne3971]

Or the real problem, no bad company in this country files Chapter 7.

[@Tmb1112]

Economies of scale means that everything gets cheaper the larger companies become. Don’t see that as much of a problem.

[@TankEnMate]

@@Tmb1112 The biggest problem is leveraged buyouts, i.e. borrowing money to buy competitors, if interest rates go up? BOOM! Or in the words of Steve Eisman (one of the guys who saw the 2008 crash coming) "They mistook leverage for genius".

[@lih-fk8by]

@@Tmb1112 if by everything you mean wages you're correct and I and everyone who works for a living does see it as a problem

[@DSAK55]

That is the essences of Capitalism: profits are Private, losses are Public

[@alexrebmann1253]

What is not mentioned in this video is that in 2013 Yellow was talking to ABF about buying ABF. That did not go well with the teamsters.

[@bngr_bngr]

Tell tell a lot about who killed the company.

[@SgtJoeSmith]

mob run teamsters killed company

[@kk4649k]

Brainwashed Americans thinking it’s the middle class workers who killed the company. (The workers ARE the union) The workers took concessions year after year. When is enough. Don’t blame the workers for NOT wanting to accept a pay cut again just so the upper management can keep making stupid decisions and live like a king.

[@Bash70]

@@SgtJoeSmith how do those leather boots taste?

[@SgtJoeSmith]

@@Bash70 did you know my top branch managers make $5 million a year?

[@williamd7161]

Growing by means of aquisitions is a big big red flag and in the end it leads to yellow's downfall.

[@lordgarion514]

Not really. Growing by acquisition is the main way big companies grow. Apple owns 125 companies. Microsoft owns 225. Google owns 200. Intel owns over 100 companies. Even Walmart owns about 25 companies......

[@lordgarion514]

And what lead to Yellow's money problems,was the worldwide economic collapse in 2008, AND THEN covid in 2019. No company could have known about either of those happening...... What killed Yellow was the greedy union. After th

[@bngr_bngr]

That’s not true. This collapse was the fault of the union.

[@Robbedem]

@@lordgarion514 the companies you mention have money, Yellow didn't have money, so they bought with money from loans. And economic downturns happen about every 10 to 20 years. So while not possible to predict exactly, companies need to be prepared for something like that.

[@Sacto1654]

I think the increasing emphasis on intermodal transport effectively doomed Yellow. I mean, look at how some trucking companies have interline agreements to move freight on longer runs via doublestack container trains (one of the first was J. B. Hunt in 1989). And some companies like Amazon and even Walmart started to build their own fleets of long-distance trucks, too.

[@RafaelW8]

What is intermodal transport

[@germangarciajr4249]

Shipping containers, for ship and train transportation

[@rooseveltrolland4903]

​@@RafaelW8Zzßßßà

[@alquinn8576]

intermodal is slow though, and is a more direct competitor with full truckload

[@robertshelton3796]

So Democrats will forgive individual student debt for people who got meaningless degrees but won't forgive the debt of a company which employs 30,000 blue collar workers.

[@pamelahomeyer748]

It borrowed too many times on its asset value and the bankers are just as much to blame

[@samsonsoturian6013]

Bankers didn't force them to take loans.

[@phillyphil1513]

indeed, same as the Collapse of the US Housing Market, certainly can't overlook the "ENABLING" element to all this.

[@samsonsoturian6013]

@@phillyphil1513 that never happened

[@ZboeC5]

@@samsonsoturian6013 Uh...When banks loan money to people that THEY KNOW can't repay...it is enabling pure and simple. They did it because they didn't care because they would then bundle all of those bad loans and sell them on the market as securities. Hence why the market collapsed. The Government of course is the reason it was allowed to happen. Bill Clinton actually signed the law that started the whole thing. It just took some years before people realized how bad the problem really was and by the time it did it was too late to do anything about. So yes the banks enabled it. Spurred on by poor Government policy sure but they fanned those flames. So yes it _did_ happen as a matter of fact.

[@edsloan8535]

Quickest way to see how well a company is run, is to simply look at their parking lot.

[@E38vip]

Gonna check the parking lot now that you mention it use to work there…

[@nandisaand5287]

I had a job where I did allot of LTL shipping (usually 1 or 2 skids at a time) in the mid- to late-00's. I knew YRC was in big trouble, and WOULD NOT use them, for fear they'd fold shop while my freight was in their system.

[@SMMiles]

Their biggest problem was using orange but calling it yellow

[@jeffreyz810]

I worked at Yellow and saw first hand the freight levels going to nothing! Im sure all the executives at Yellow got a golden parachute for there inability to manage while the workers got a job well done message before hitting the streets.. Doesn't seem right ...$ $2,000 a month Cobra from the union medical plan..And made too much for Affordable Care Act medical ..What about the families?? Sad!!

[@jaygold4467]

The CEO and Controller should be arrested and jailed for malfeasance. Criminal.

[@brtecson]

Why didn't they just.... >>>RAISE PRICES

[@jbtallguy]

The people blaming the workers have no idea what they are talking about. The amount these guys gave up in the last couple decades just to keep this company alive is insane. It was entirely corporate greed, and bad management. Y’all need to stop licking those boots. It won’t make you rich too.

[@GeorgeChuy]

The business model of low cost and expansion by acquisition might be a wrong one from the very beginning. The struggle between the board and the union seems by comparison, an irrelevant one.

[@u686st7]

The union bent over backwards for Yellow for 15 years with concessions and givebacks. I know guys that quit Yellow to go to non-union carriers for more money.

[@cyclopsvision6370]

the teamsters didn't give anything up, all they did was demand more and more and more and more until they broke their toy

[@gund89123]

@@cyclopsvision6370numbers please.

[@sdvten]

@@cyclopsvision6370 Yep. The union guys think if they wanted a 15% pay increase and 10% more contributions to pensions and they actually got an 8% pay increase and 5% contribution that they were actually giving up something. I'd love to see these union guys actually go out and have their own business. Seems to be a common theme with union members. Never ran a business and know nothing about running a business.

[@timetraveler9218]

Those executives should be forced to pay every cent back out of their own pockets

[@gund89123]

Capitalism: Profits are private Losses are public

[@GreatNW]

As someone who's actually worked with yellow and the companies that owns that have become yellow I am not actually upset about this their drivers were rude their trucks were unkept and most of the time our product was damaged. Throw on top of that the local FedEx LTL is closing down in my area and this puts the company in a very tough position.

[@jayschafer1760]

Exactly. Yellow's damage rates, on time performance, and customer service were all abysmal. It's going to hurt shippers to have to pay a LOT more, but at least they won't be dealing with service that bad.

[@chriswong9158]

New transportation model is coming: 24/7, no insurance, no SSI, no benefit, no break, most important no Union Drone drivers & delivery service with no labor complaint.

[@goxyeagle8446]

More money for other trucking companies 👏🏻

[@BAS3BALL_bat]

😂 Yep. And this opinion is why they went under. It is counter-productive to hate the base of what makes the company.

[@parienting802]

Not only management or the Union this this. I worked at Yellow too and I saw how drivers and dock workers just milked the company as well. Sad that people think they can milk a company with no consequences.

[@ShidaiTaino]

Employers and employees want to exploit each other for maximum benefit isnt new

[@DocSpengler]

Found a beancounter

[@SuperTransmission]

My brother was a teamster he worked so slow you couldn't see him move.

[@AdamBechtol]

p@@SuperTransmission

[@juanfranflanslife5401]

About time they stop using what happened in 2020 as a excuse to not make payments

[@nobull4414]

Because it's the truth. Yellow, unlike XPO and ArcBest, doesn't have multi-billion dollar holding companies and Old Dominion, owned by Schneider National propping them financially.

[@SgtJoeSmith]

@@nobull4414 its not right when a company pays employees more than it makes and has to take loans to keep up with payroll

[@alexrebmann1253]

@@SgtJoeSmith didn't stop CEOs from getting raises and bonuses.

[@SgtJoeSmith]

@@alexrebmann1253 of the teamsters who made $30 million profit off yellow drivers a year!

[@nobull4414]

@@SgtJoeSmith Yellows problem is that took on debt through acquisitions that they (Yellow) couldn't manage.

[@The.Dude.Abides.]

“We want to be the low cost option amount our competitors while still maintaining union employees.” Can’t understand how this insane strategy didn’t work… 🤦‍♂️

[@Xeonerable]

I bet the C-suite made out pretty well, companies failing only hurts the people at the bottom.

[@lukerinderknecht2982]

Very true

[@Vizzi12]

C-suite made it out with 12 weeks of severance pay, anyone below them made it out with 2 weeks

[@davecramer9725]

They surely should not get 12 weeks for what they did give them nothing

[@samsonsoturian6013]

That's silly. Managers were the major shareholders, and those shares are now worthless.

[@paule8536]

Bill Zollars , a former CEO of Yellow laid the groundwork for this disaster! Complete incompetence.

[@boristheamerican2938]

Hes on the USPS board now appointed by Trump Drain the swamp. MAGA

[@Dawgpound205]

I gave Yellow 10 years of my life. I gave the job everything I had, and I done everything they asked me to do. Work nights? Sure. Dock? Absolutely. Out of town for 2 weeks to help out other places? No problem. I was proud to tell people I worked there, just like my Father at Roadway Express for 30 years. 9 months later and it still doesn’t seem real, the whole situation seems like a nightmare. The Teamsters bailed Yellow out time and time again, and corporate management/executive board could not seem to make it work. In my humble opinion, for what it’s worth, is that Yellow intended to shut down all along. The reason I believe it is because Yellow had other options rather than bankruptcy, like splitting off the operating companies and selling them, like UPS did with T-Force. Yellow could have sold Reddaway, Holland, or New Penn, and it would have had the same result as integrating the companies, which was eliminating redundancy. Selling the sister companies would have also added liquid cash to pay down the debt. No company would want to sell some of their assets and downsize, but in a worse case scenario (like bankruptcy) you make painful decisions to survive. In closing, Yellow/Roadway/Holland/New Penn/ Reddaway is just memories now. One thing I’ve learned over the years is that the show goes on, with or without you, big or small. I pray that everyone who has lost their jobs have gained employment elsewhere, for those that retired I want to wish them congratulations on a job well done.

[@el-hp1lj]

Costco Wholesale is sucking up many of the drivers that are near Costco distribution hubs. Costco is growing and expanding their fleets

[@daleducheneaux7726]

Yellow went from 26 percent market share to 9 percent in 15 years. Management is awful and that is why this company had to file bankruptcy.

[@appomattoxross6751]

With any company that is in trouble: Just find the company headquarters and look for the expensive works of art on the walls. That's the signal to leave.

[@Vizzi12]

When apple was building its HQ, they used a glass that has to be chemically created by burning two gasses together to create such a high standard of purity, there is zero point to it but it’s insanely expensive. Google has some of the most insanely developed buildings and amenities. Those two companies are just fine

[@appomattoxross6751]

Correction. I should have said "most companies" and not "any company".@@Vizzi12

[@christophero1969]

@@Vizzi12 Apple and Google claim depreciation and deferred construction costs on their taxes, Duh. You cannot, as a business do that with art.

[@Comm0ut]

@@Vizzi12 Apple and Google have literal billions to burn on toys and reasons to coddle their highly skilled highly mobile workforce. OTOH blowing cash on shiny objects is not for unprofitable companies. There is no shortage of office drones.

[@phillyphil1513]

good breakdown WSJ, i'm liking your coverage of these topics (short and sweet). 🤙

[@thetowndrunk988]

Yellow had more than 12,000 trucks. That is correct. However, they did NOT have more than 12,000 long haul trucks. That graphic is incorrect.

[@blogintonblakley2708]

You take a big risk anytime you go to work for someone else. This is just another example of that.

[@QuantumImperfections]

@Sacto1654 made a great point that the increasing emphasis on intermodal transport was leaving Yellow behind. I'd add the extreme demand to make logistics prices as close to zero as possible a pain point for all logistics companies.

[@Marcara081]

Rail has always been cheaper but government regs protect the trucking industry by forcing rail to become more expensive.

[@Lizzbird_]

They should’ve made their logo yellow instead of orange

[@semperfidelis1550]

I work in distribution and Yellow was the cheapest and the worse carrier. I stopped using them because they were undependable and had bad customer service. I gladly paid more to avoid the headache. They seemed very poorly managed.

[@boristheamerican2938]

What do you expect from the cheapest carrier? First rate service?

[@semperfidelis1550]

@@boristheamerican2938 No, but not terrible service.

[@tysone1254]

Ceo made over 2 million dollars last year so they just not have been struggling too bad

[@davecramer9725]

More than he should have been paid

[@peppapigthekiller7539]

That’s it? I’ve heard of CEO’s with smaller companies making more.

[@FreeHat]

Underpaid for the position. Look up what other ceos at similar sized companies are making.

[@tysone1254]

Yeah because they run a successful business. All Im saying is its clear that the ceo cared more about himself getting paid than the business living.@@FreeHat

[@roinas12]

Over the last couple of years of dealing with Yellow, its not hard to understand why. Their employees are union and they act horribly to customers. Not moving a shipment 1" further than they think they should not carring whether or not a customer can move if from that location. When asked, they give tons of attitide. I finally had it with being treated so poorly I tried to get the driver's name, but he kept sheilding his ID. I finally got his name and his response was, nothing will happen. I'm union! This type of entiled attitue drove potential customers away. Now I know this won't be every driver, but it was every driver I came accoss.

[@antoinepageau8336]

I worked for Yellow in the 90’s it was introduction to office work (hated it). Back then we were using a computer system strait out of the 70’s! Management had been neglecting this company for over 30 years. The real question we should be asking is how can the system let such a poor player go on for so long. How many tens of thousands will loose their pensions because of this?

[@user-ct5cg7dz5m]

The CEO and Controller should be arrested and jailed for malfeasance. Criminal.. RIP to all the honest hardworking truckers who lost their pensions.

[@wardogies]

That will never happen

[@kcgunesq]

Wow. The Teamsters sure showed Yellow. Of course, the senior leadership team will walk away with millions. But somehow, Teamsters will see this as a victory.

[@winstonchurchill3597]

Teamsters didn't ruin this company - management did.

[@motorguy4203]

@@winstonchurchill3597they chose to not negotiate for 9 months. They fought so hard for a penny that they lost their jobs lol

[@murraymadness4674]

Did you watch the video? They took paycuts for years only to be cired in the end. Get it?

[@bertgrau3934]

​@@murraymadness4674 The company wanted to I crease the pay, the union refused. Whose fault is that?

[@kcgunesq]

@@murraymadness4674 My take was that Yellow tried to tell them that they couldn't afford to pay them what they wanted. The union stood firm. So instead of having some pay, along with all the other benefits of continued employment, the drivers now make nothing. Where I am from, something is better than nothing. Now, sure, if the market is robust enough, those drivers were right to not accept lower wages as they will obviously just walk across the street and get an equal or better job. But if those across the street jobs don't exist, it suggests to me that Yellow was paying at least market, and possibly above market. So, sure, management likely made some bad choices. But Sr. management will make millions either way and the average worker is now out of a job that they probably can't replace. So, tell me again, why was the union strategy a winning one?

[@robertotto5811]

I was there for 39 years. This is an accurate portrayal of Yellow's collapse. The only thing I would disagree with here is, how things went down with the Teamsters. Yellow wanted to reopen the existing contract with the teamsters while they were in the middle of contract negotiations with UPS. Initially they wanted more concessions. As Murphy said the concession stand was closed. At the last minute they agreed to match the contract that ABF signed with the teamsters. But we all knew the money wasn't there. And the banks caught on. You can't run a business on credit forever.

[@Boss619Tycoon]

They burned the company down. They had to run a low profit margin to keep their labor costs low. Not a way to run a business

[@peterpalmer9757]

What a horrible business model. 5 billion in revenue 20 million net income this ain’t Amazon where they can justify not making profit for all those years

[@Casey-summer]

Great video, but one thing truckers fail to do is planning for retirement. I was a trucker and really didn't know much on growing my earnings then i was working. People grappling with the difficulty of meeting essential expenses often encounter this situation due to inadequate savings during their working years. The decisions taken in readiness for retirement carry extensive consequences, as demonstrated within my own family dynamics. Differing investment approaches yielded disparate results. Guided by a financial advisor, I'm currently retired and still earn monthly from my investments.

[@sloanmarriott5]

Indeed, that's accurate. I'm currently in my mid-50s. My husband and I were on a similar path until a couple of years ago when I decided to shift my investments to her wealth manager. While I haven't quite caught up to her accumulated profits over the years, I'm at least earning more now. I'm generating income even before retirement, and my retirement fund has experienced remarkable growth compared to what it would have with just the 401(k). It's quite amusing.

[@mellon-wrigley3]

It's regrettable that many individuals lack access to such insights. I understand why people might become anxious. Insufficient information can indeed pose significant challenges. Personally, I've been able to generate over $31k passively simply by investing through an advisor, and the best part is, I don't need to exert much effort. Regardless of economic fluctuations, skilled wealth managers consistently deliver returns.

[@Potatofarmer1898]

YRC Always damaged our freight. Compared to SAIA or any other company, by a country mile I had more complaints for damaged freight with YRC than with anyone else.

[@brmolnar]

Clearly the reason was their false advertising. The logo was Orange, but they insisted on labeling it as Yellow.

[@TheSouthernMensch]

700 Million?! Where’d the money go? Top executives?

[@tallflguy]

Yes

[@mr.stonerUDX714]

WENT TO THE UNIONS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[@paradiseexpress3639]

@@mr.stonerUDX714 went to the workers? That's awesome

[@Vizzi12]

@@paradiseexpress3639 and the union 😂 it’s a cult you are forced to pay into

[@davediamond7228]

i know someone that works at one of their transfer hubs ,loading/ unloading trucks...and it was that loan that kept him working during the pandemic ....

[@jensumayer]

They are acknowledging the $700 million bailout loan, but only casually mention that the company only exists because taxpayers fully fund the interstate system - another huge subsidy to the trucking industry. I hear there is a driver shortage, so most drivers should be able to find a new job quickly, but probably not on union terms.

[@bngr_bngr]

Yeah that union squeezed until the company went broke.

[@02nupe]

@@bngr_bngr mgmt squeezed the company and we see the result.

[@solosix3991]

​@@bngr_bngrhow do those boots taste?

[@stevec8861]

Nonsense. Roads are not subsidized (fuels are taxed to fund roads and semi trucks pay additional road taxes above that) and there is no driver shortage. The industry has a glut of capacity. At moment only electric vehicles get free roads, and that won't last long. As electrics gain market share, there will have to be road taxes place on that electricity.

[@jensumayer]

@@stevec8861 Nonsense. Motor fuel taxes bring in $90 billion per year and the US spends $416 billion per year maintaining roads.

[@NTATchannelNickTaylor]

I remember when Yellow absorbed Roadway, I was one of their towing contractors here in S. Texas. One thing I remember vividly Roadway trucks and trailers were pure 🗑🚽. I don't see how the drivers dealt with running those junk wagons. Yellow had better equipment but providing service for them was sketchy from pickup to payment. Cut them off at the beginning of the Coof...

[@superman60201]

So you know there is another channel that is far superior in analyzing the drops and rises in companies.

[@RailFireProductions]

This is similar to the Penn Central bankruptcy, only with trucks.

[@MagicCyclops]

Makes sense the company called themselves yellow and had an orange logo what did you think was gonna happen they couldn't even get that right!

[@knucklehead7456]

It worked for 99 years.

[@TenPinTrucker]

Bottom line is that the federal government had no business bailing them out in 2020 and now we stand to lose hundreds of millions on a company that should have been bankrupt years ago. End corporate welfare!

[@wainber1]

When I think of the Yellow company, I think of, taking inspiration from the 1960s song “Mellow Yellow,” the end of Yellow being anything but mellow.

[@ajbudda1038]

My supplier, Dover Corporation (fortune 100 company) used Yellow Freight exclusively to ship to Canada because they were the cheapest. Yellow repeatedly damaged goods in transit, damaged goods costing tens of thousands of dollars. Damaged goods on arrival were so common that I started refusing complete deliveries. Yellow Freight deserved to go bankrupt

[@pushvedula5640]

Wow and back in January after Fastenal let me go because of some budget cuts they had to make at their branch near me, I can’t believe that exactly two weeks later I actually had an interview at YRC but didn’t have enough experience for the job they offered!

[@rayoflight62]

By not integrating the two acquisitions, Yellow tripled their administrative overhead costs...

[@russellkanning]

what a surprise that a union place went out of business

[@Bill-cb4bh]

I like how yrc companies competed against each other

[@william7286]

Why bailouts aren't in the form of stakeholder control is beyond me. All companies that have received bailouts could have been majority owned and operated by the federal government - so much revenue potential was lost. Plus, think of how better off workers would be under a private-public partnership. Sad.

[@uromvictor]

Does the federal government know how to manage anything

[@william7286]

@@uromvictor Without proper funding and leadership, probably not. We get the government we deserve.

[@SgtJoeSmith]

@@uromvictor no

[@SgtJoeSmith]

the gov wouldve cut pay in half or else tripled prices. the gov cant even run the usps.

[@william7286]

@@SgtJoeSmith Pretty sure that the workers would have been better off. You must be referring to the executive leadership team. The USPS' budget woes can be largely attributed 2006 law requiring it to prepay retiree health benefits 75 years in advance, a provision to which no other government agency or private corporation is subject. If I were UPS, FedEx, etc. - this would be the type of policy I would lobby so as to remove a public option to logistics.

[@teashea1]

Another excellent video - content, production values, organization, writing, presentation -----

[@jguillermoii]

There's no problem. An increasing trend involves companies recruiting independent truck drivers for their fleets, cutting costs by avoiding benefit expenses. These contractors are more affordable than opting for Big Freight Transport. I believe more freight companies might face closures due to this ongoing shift.

[@paulkelly4731]

What went wrong! Management agreed to a Contract with wage, benefit, and work rules that made in uncompetitive in the industry. Management wanted to avoid a strike and placate the Union to it's own demise. If you are the only Union Carrier in a non-union wage environment, it will not end well for you... Management just couldn't say NO... and now they're gone.

[@Pinion512]

Unions are a huge part of why this happened. Company leadership made some trash decisions, but union was the bigger (if not biggest) part.

[@biometal770]

It was probably mainly due to all the debt they took on during the acquisitions.

[@MrTruker1]

Roadway ( in California) had junk trucks and trailers. 30 years ago I turned down yellow. They was a terrible company to work for. I glad I never went. You also forgot to mention that the management gave themselves FAT BONUSES. Lol

[@fern8580]

First rule, a member of the military + a union member = bankruptcy Second rule, given the huge taxes taken by the different levels of Government, companies are forced to abandon the "cheap" to go to "the expensive" Best regards from Harvard !

[@Jancan20]

Yay! Union, everyone can sit at home now

[@mrbond9882]

25 million profit from 5 billion? Lol Jesus

[@t.dehart4691]

as a 26 year employee, this has been tough. now they sold 130 terminals for 1.9 billion, way over what they owe. they still have terminals and the rolling stock to sell…. where is all this overage going?!? It should go the pension funds that it owes billions.

[@christopherdean2893]

Where did all the money go? Always follow the money

[@donovanjones4175]

The new paradigm in trucking has been to make the driver an owner/operator. Thereby putting the debt on the driver, the cost of fuel,maintenance and the truck itself will put you in debt for years. My guess is smaller trucking companies will buy up the assets, and offer the trucks for any one wanting to be an o/o. If they don’t hustle or pay up, take the truck back and find another guy.

[@GhostRider-sc9vu]

You know about Slow Wagons in Fast Traffic I see.

[@RJ-or8bw]

You mean lease operator right?

[@ZboeC5]

Don't confuse fleece/purchase with an actual O/O. The problem is a lot of younger guys don't know the difference until it's too late.

[@TenPinTrucker]

Predatory fleece purchase should be illegal, but our government encourages it because corporations matter more than the individual. OTR trucking is so bass ackwards right now it's ridiculous, and the government wonders why they can't recruit drivers anymore.

[@Comm0ut]

You nailed it. I see it's not your first rodeo! That business model relies on new drivers being tricked because they don't "own" anything until it's paid of, they assume ALL the maintenance, towing and repair risk, and if they're injured etc and can't drive they lose it all. When it doesn't pay a big business to own the hardware an individual is even more at risk.

[@ctrl-shift-run8681]

If you want another interesting story, look at the recent bankruptcy of America's biggest ATM maker.

[@sjbdeebo2]

I'm glad I won't be seeing these trucks on the road anymore. I'll never again have to explain why the Yellow is orange.

[@michaelgoodwin1351]

Worked for Reddaway as a line haul driver from 2017 - 21. Great company to work for until the parent company YRC/Yellow starting getting more involved. Didn’t make sense that they would change how we ran freight, being that Reddaway along with Holland and New Penn actually made money. Next thing you know we were rebranded as Yellow and now the company is defunct. Good times though..

[@user-ob5rg6ne6l]

WSJ reports are the best ❤

[@dougjohnson4266]

Did the idiot CEO's and boards that inked these stupid acquisitions have to fork over any pay/bonuses? NAHHHHH! Just screw over employees as normal! Maybe sue the CEO's with the 'Got to grow or die' mentally for wrecking the company?

[@woofbark4475]

Totally agree... growth is not always a necessity! Being able to comfortably maintain your service and quality is often far more important.

[@Vizzi12]

The acquisitions happened years ago, the current set of management was actively cleaning up the mess left behind from those horrible decisions

[@FreeHat]

Current CEO isn't the CEO that bought all those companies. The CEO that purchased all of those companies is now on the governing board of USPS.

[@order9066]

Solid presentation.

[@xanderunderwoods3363]

What Yellow did to Roadway was illegal and every Roadway employee they screwed over are happy to see them fall. The hostile takeover created HUGE internal animosity.

[@randyosborne3971]

If we had just one show that could bring us facts on 1) the real saturation rate of zombies in the stock market? Is it 25%, 45%, 65% zombies? 2) What is the ratio of Wallstreet bankruptcies being Chapter 7 or Chapter 11 Restructuring in the past 15 years. Chapter 11 Restructuring just adds to the large pile of zombies. 3% Chapter 7 and 97% Chapter 11 ??? 3) Moody's, Fitch and S&P are turning a blind eye on companies that are rated Grade BBB investment grade, but should be dropped one grade lower into junk. Compile this information and maybe this is the Black Swan.