Author: Dan Avila, VP of Sales, Consulting & Automation at enVista
As many may have heard, Yellow Corp. has ceased operations as it prepares to file bankruptcy. This news is unfortunate, but not at all unexpected as the carrier has been struggling for some time. Yellow had a $700 million pandemic-era loan with the government and has been in heated contract negotiations with its unionized workforce. It’s the end of a long road for Yellow, which has a 99-year history, and has recently employed 22,000 union employees and another 8,000 non-union employees.
Navigating the Void
Yellow’s ceasing of their operations and impending bankruptcy has created a void where shippers are working to cover their loads and other carriers are looking to absorb as much of Yellow’s former customers’ freight as possible. Additionally, many drivers are now without a home and many assets will most likely be liquidated in the future.
According to enVista’s Director of Transportation Consulting, Nick Brown, there appears to be plenty of capacity out there where other LTL carriers can absorb all of Yellow’s volume. This is good news for shippers who will be able to have their loads covered; however, the bad news is that it will more than likely come at a higher cost.
The increase in freight to carriers comes as a reprieve during a downtime in freight volume and pricing. This will put carriers in a stronger financial position and allow them to increase their costs to new and existing businesses. It will also provide them the time to review the new freight they absorbed and shed any undesirable, new or current, volume/locations/type of freight. This shedding is presented to customers as stark price increases, forcing carrier changes as long as customers notice the specific lane changes.
Carriers such as FedEx Freight, Old Dominion, Estes, TFI Int’l, ABF, R+L Carriers, Saia and several others will benefit from Yellow’s demise and are expecting an increase in volume they field many calls from Yellow’s former customers this week.
Ensure Optimal Capacity With enVista
enVista’s transportation consultants can work with shippers to ensure your loads are covered and you are leveraging the right mix of national versus regional carriers and evaluating the right mix of cost and service to minimize the cost increases that may be out there. There is no better time than now to look at the LTL market and ensure you have the correct mix of cost versus service and national versus regional carriers. enVista’s transportation consultants are ideally qualified to help you sort through and address your freight challenges and questions. Contact us today.
About the Author
Dan Avila is the VP of Sales, Consulting & Automation