According to a recent survey conducted by Morgan Stanley, the aftermath of Yellow Corp.’s closure has led to a second phase of reshuffling within the less-than-truckload (LTL) freight industry. The survey, which included responses from over 300 shippers and third-party logistics providers (3PLs) who previously worked with Yellow, revealed that 35% of them are still in search of a new carrier for their LTL shipments. This indicates that the initial post-Yellow choices may not be permanent. This includes factors like pricing, service quality, and network compatibility contributing to the ongoing shake-up in the LTL landscape.
Historically, Yellow held a 9% share of the LTL market. This share likely diminished leading up to its shutdown in late July. While many had expected larger carriers to absorb Yellow’s share, smaller and regional LTL players ended up benefiting from the situation. This was due to excess door space and minimal disruption. The report suggests that carriers appear more content with the current state of affairs than shippers. Consequently, this could potentially lead to a surprising magnitude of change in this second phase of the freight reshuffle.
Interestingly, the survey found that service quality provided by new carriers was generally not a significant issue for shippers and brokers. It found that 39% were very happy and 60% at least somewhat happy with their new carriers. In contrast, pricing was a more prominent concern. Only 22% expressed very high satisfaction with their new rates. As for timing, about half of those looking for new carriers intend to do so within this year. Otherwise, the rest plan to make changes in the first half of the following year. Additionally, 80% of carriers reported that they have stopped receiving inbound requests from Yellow’s former customers, suggesting that further shifts in LTL freight may be on the horizon.