One of the nation’s largest trucking companies, Yellow, is preparing for bankruptcy. The carrier has seen a significant decline in customers amid a cash crunch and union negotiations. A bankruptcy filing would put the company at a high risk of a liquidation since a large number of customers have already begun abandoning the trucker. Yellow continues to explore other options, but could end up seeking bankruptcy court protection as soon as this week.

According to the WSJ, “Yellow has been losing thousands of shipments to other operators because of the risk that a labor dispute will disrupt its operations.” The trucking company avoided a planned strike this week, but the loss of customers continues. TD Cowen states “Yellow has seen freight volumes fall 80% in recent days.”

A representative from Yellow says the company is continuing negotiations with Teamsters about a new contract that would give Yellow the ability to restructure its operations to become more efficient. A bankruptcy filing would highlight the $700 million Covid-19 rescue loan Yellow received from U.S. taxpayers in 2020. Yellow has around $1.3 billion in debt maturities next year, according to securities filings. Of the $1.3 billion in loans to the company, $729 million is from the U.S. Government, according to Yellow’s latest quarterly report. The company reported around $1.48 billion in total debt in the first quarter against only $806 million in assets. It’s cash holdings fell to around $100 million at the end of June, down from $235 million in December.

According to the WSJ, “the union said Sunday that it had withdrawn plans for a walkout after a pension fund agreed to continue to extend health benefits to unionized workers at Yellow and a sister company.” The pension fund said it would give Yellow another 30 days to make deferred payments.

This link will take you to the WSJ article for more details regarding Yellow’s future.   A.N. Deringer, Inc. will continue to monitor the situation…