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Home›Trucking›Trucker Yellow seeks to stabilize finances by streamlining operations

Trucker Yellow seeks to stabilize finances by streamlining operations

By Michael K. Davidson
May 31, 2021
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Trucker Yellow Corp. is moving forward with a radical overhaul aimed at making the large but financially struggling carrier more competitive in a booming freight market.

One of the largest trucking companies in the United States, Yellow will combine its regional and national trucking operations into a single unified network, an initiative the company says will modernize operations, eliminate waste and simplify matters for customers such as Walmart. Inc.

to reserve shipments.

Kan., Yellow-based Overland Park had been struggling for years when the pandemic plunged the company into a liquidity crunch. A $ 700 million federal coronavirus aid loan provided a lifeline that got Yellow into debt, then called YRC Worldwide Inc.,

invest in new equipment and pay back millions of dollars in healthcare, pensions and other missed obligations


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Despite federal support, which the government said it provided because the company was a key provider of military transportation services, Yellow has lagged behind its peers as the recovery in the U.S. economy has boosted freight demand. .

The carrier went down to a net loss of $ 63.3 million in the first quarter, when bad weather shut down operations at several of its freight terminals, and said a 61.3 percent drop from a year over year adjusted earnings before interest, taxes and depreciation charges. , at $ 13.2 million. Yellow competitor Old Dominion Freight Line Inc.,

a Thomasville, North Carolina-based trucker reported a 14.1% revenue gain during that period, and his quarterly net profit of $ 199.4 million was nearly 50% ahead of the period of last year.

Yellow leaders say bringing their networks together under one roof – an effort that began in 2019 and gained momentum after last year’s $ 700 million federal loan – could help close the gap .

More profitable trucking competitors such as Old Dominion and XPO Logistics Inc.

have gained market share in recent years by offering a streamlined service for regional and long-haul transport. Yellow’s integrated network will offer one-day, two-day and three-day shipping options, the fastest growing business the company says, as well as what it calls “long-term services.” economic couriers ”.

Yellow is one of the largest US full-lot transport operators, a critical transportation niche for retail and industrial supply chains, in which operators combine shipments from multiple customers onto a single trailer. The company’s Holland, New Penn and Reddaway brands provide LTL service in the Midwest, Northeast and West, respectively, while its YRC Freight business provides nationwide coverage.

“Many times you will see customers who have multiple brands saved to their docking station at the same time. It creates inefficiency for them, and frankly it creates inefficiencies for us, ”said Yellow President Darrel Harris, who oversees integration. “Imagine them making a call and having a truck with a driver. This is what they want.

Yellow plans to integrate its trucking brands by mid-2022, a tight schedule for a process that transportation industry consultants say can be tricky and time-consuming. A previous integration of two national networks after the company bought in 2003 from rival Roadway, which ultimately created Yellow’s YRC Freight unit, took years.

“Each of their regional carriers has a distinct and distinct footprint,” said Mike Regan, co-founder and head of relationship development with logistics and freight management consulting firm TranzAct Technologies Inc. “If it were that simple, they would have done it already. he.”

Time is on the side of the business, said Satish Jindel, president of transportation research firm SJ Consulting Group Inc. “Right now the LTL market is so tight that shippers are more accepting of the problems of shipping. service ”and the disruptions that may arise during the transition than they normally would, he said.

More competition is to come. In April, Canadian trucker TFI International Inc.

closed its $ 800 million acquisition of United Parcel Service Inc. of

UPS Freight and plans to step up investments in an LTL business under the name TForce Freight.

The biggest opportunity to improve Yellow’s business “is to complete the transition to One Yellow,” said Harris, who joined the company last year and has spent much of his career with FedEx. Corp.of

Freight division. “This is what really makes us change things.”

Write to Jennifer Smith at [email protected]

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8



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