So, what will the YRC closure mean for me and my business?
Nathan Gartner 8/9/23
As you may have heard, LTL trucking giant Yellow Corporation has recently declared bankruptcy. This came after a $700 million loan was unable to keep the unprofitable company afloat during the pandemic. Mismanagement and broken-down negotiations with the teamsters union resulted in the 99-year-old company finally closing its doors. Over the next few weeks, YRC will be winding down business operations in anticipation of its closure. It will also begin liquidating its huge fleet of trucks, equipment, and terminals. YRC was the third largest LTL carrier in the industry. This means that even if you do not work directly with them, you will see the effects sooner than later.
Shippers, especially Yellow customers, are going to see that the price for moving LTL freight will rise through the rest of 2023. In fact, there has already been a small but noticeable increase in rates less than a week after this announcement. This increase in rates will affect all LTL carriers across the board including big names like XPO and ESTES. This is due to slack left in the industry from the closure of Yellow Corporation.
YRC was known for offering exceptionally low rates. Without them in the picture, LTL carriers do not have to drive their pricing as low to compete with YRC’s low pricing strategy. LTL carriers are also seeing a sudden and very large increase in volume as shippers who previously used YRC scramble to move their freight by other means. This gives LTL carriers leverage when it comes to pricing because they can raise prices while shippers are desperate.
A sudden and large increase in volume also means that delays, missed pickups, and other service interruptions are going to become more commonplace. This will apply to all LTL carriers as they struggle to pick up the slack left behind by YRC closing. Some carriers are offering services to rescue freight that is held up at YRC terminals. This will cause delays as extra pick-ups are being added to those carriers’ schedules.
Finally, YRC is going to be piecing out its massive fleet of 14,000 trucks. This may come as good news if you are a carrier that is looking to upgrade your fleet, or you are an owner operator looking to get an affordable truck. Despite worldwide auto production slowly going back to normal, there is still a shortage of new model trucks. Many of YRC’s trucks are late model trucks. This makes them especially desirable to those who are struggling to find new equipment.
How can you navigate the closure of Yellow Corporation?
The experts at New Light Enterprises stand ready to help you and your company through this industry-changing event. New Light benefits from previously established close ties to some of the best carriers in the industry. This means that we can help you secure better rates and better service without having to search for and negotiate with carriers yourself. This leaves you time and energy to focus on growing your business. Send us a message to see how we can help you!
This is not the first time that we have helped others during a major supply chain disruption!