TONAWANDA, N.Y. — After nearly 100 years in business trucking company Yellow Corp. will file for bankruptcy, according to the Teamsters union, after being unable to refinance accrued debt of over one billion dollars. The closure leaves thousands across the country jobless, including at least three hundred in Western New York.
"It's 30,000 jobs that are lost because of this bankruptcy. So it's a big concern, Yellow, you know, roughly moved about 7% of truckload shipments," said Doctor Patrick Penfield, professor of supply chain practice at Syracuse University.
Though a recent announcement, the decision was not a sudden one for the company. The trucking business has been struggling financially for years, having received billions in worker concessions and millions in federal bailout funding. During the 2020 pandemic, they received a government loan of $700 million dollars as part of the COVID-19 relief program.
"Unfortunately, they just seemed to not be able to manage themselves. Their cost just seemed to really, I think, get the best of them. In the pandemic, a lot of freight companies did really, really well and you know, Yellow didn't do that well. And part of it was because of the amount of debt they had in addition to, you know, how much their costs were, the cost structure they had within the company." Penfield added.
The bankruptcy filing affects hundreds of former employees in Western New York, including in the towns of Tonawanda and Cheektowaga. This raises concerns about employee pensions, and whether or not former workers will be able to keep their benefits.
"Everything will go to bankruptcy court, and then it'll be kind of figured out as far as who gets what. It wouldn't surprise me if a lot of the workers did lose their pensions, however, the government may step in and try to help those workers," added Penfield.
As what was once the third largest trucking company specializing in transporting for companies like Walmart and Home Depot, Penfield warns that without Yellow Corporation's services prices on goods from these stores could begin to increase due to limited transport availability.
"Yellow had roughly about 7% of the market share and there's probably about 10% slack. And that means basically just extra capacity that's in there. Now that being said, prices will go up and that's just the law of supply and demand, and that's what we're going to see probably in the next couple of weeks." said Penfield.
As of Sunday, July 30, operations have ceased at all Yellow Corporations sites. A sign posted outside Yellow's Tonawanda site has announced that over one hundred former workers have already been unemployed.
"I think from what I understand is that basically, they're going to be shutting down their operations. So, they're not going to reemerge from bankruptcy. It's basically the company shutting down." added Penfield.