Yellow Exec Informs Sales Staff of Bankruptcy Rumors

Jun 25, 2023

According to reports, Yellow’s senior vice president of sales informed staff that their last day would be on Friday, and that the carrier is planning to file for bankruptcy on Monday. This announcement follows news of Yellow’s decision to limit pickups across the country, which was detailed in a leaked memo. One of the key factors behind this potential bankruptcy is a shortage of cash. Financial services company Stephens revealed that Yellow was burning up to $10 million a day, which could lead to the company breaching its liquidity minimum of $35 million at any moment.

The potential impacts of Yellow’s bankruptcy are unclear, with mixed comments from publicly traded trucking companies in the industry. Knight-Swift’s president and CEO, David Jackson, expressed interest in acquiring Yellow’s assets if the opportunity arises, citing their success in acquiring facilities from Central Freight Lines during its bankruptcy. On the other hand, J.B. Hunt’s CEO, John Roberts, did not comment specifically on Yellow’s situation, but noted that changes in stock prices suggest a potential benefit for their own LTL operations.

In other news, Waymo Via, the autonomous trucking unit of Alphabet Inc., recently announced a shift in focus from autonomous trucks to autonomous passenger cars and ride-hailing services. This decision follows a series of departures and job layoffs within the autonomous trucking industry. However, Daimler Truck CEO Martin Daum remains optimistic for Waymo, emphasizing that autonomous truck development is an ongoing process, and that Daimler will continue to work with Waymo to advance the technical development of autonomous truck platforms.

In terms of trailer bookings, June data from ACT Research shows a decline in trailer backlogs, mostly in dry van, reefer, and flatbed trailers. Dump trailer backlogs, on the other hand, have risen. Despite rising cancellations, the demand for trailers remains strong, with many fleets still in line due to relatively healthy backlogs.

Lastly, the Department of Energy/Energy Information Administration reported a significant increase in the average weekly retail diesel price, which jumped 9.9 cents per gallon to $3.905. This price spike can be attributed to the ongoing rise in ultra low sulfur diesel (USLD) prices. The DOE/EIA predicts a gradual increase in Brent crude oil prices, reaching an average of $84 per barrel in 2024.