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WASHINGTON — The Teamsters said on Sunday, July 30, that the union was served a notice that Yellow Corp is ceasing operations and filing for bankruptcy, leaving 30,000 workers in limbo. “Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” Teamsters General President Sean M O’Brien said in a statement. Earlier in the day, the Wall Street Journal reported about the closure of the trucking firm’s operations which cited notices sent to customers and employees. Last week, WSJ also reported that the company has laid off a large number of workers. Earlier this month Yellow averted a threatened strike by 22,000 Teamsters-represented workers, saying the company will pay the more than $50 million it owed in worker benefits and pension accruals. The company said on Thursday it is exploring opportunities to divest its third party logistics company Yellow Logistics Inc, and is engaged with multiple interested parties. Its customers include large retailers like Walmart and Home Depot, manufacturers and Uber Freight, some of which have paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier went bankrupt. In 2020, the Donald Trump-led government rescued the company with a $700 million pandemic relief loan in exchange for a 30% stake. Yellow did not immediately respond to a request for comment. WHAT WOULD BANKRUPTCY MEAN FOR YELLOW? According to Satish Jindel, president of transportation and logistics firm SJ Consulting, Yellow handled an average of 49,000 shipments per day in 2022. Last week, he estimated that number was down to between 10,000 and 15,000 daily shipments. With customers leaving — as well reports of Yellow stopping freight pickups last week — bankruptcy would “be the end of Yellow,” Jindel told The Associated Press, noting increased risk for liquidation. “The likelihood of them surviving and remaining solvent diminishes really by the day,” added Bruce Chan, a research director at investment banking firm Stifel. Yellow declined to comment when contacted by The Associated Press on Friday. In a Wednesday statement to The Journal, the company said it was continuing “to prepare for a range of contingencies.” On Thursday, Yellow said it was in talks with multiple parties about selling its third-party logistics organization. Even if Yellow was able to sell its logistics firm, it would “not generate a sufficient amount of cash to keep them operational on any sort of permanent basis,” Chan said. “Without a major equity injection, it would be very difficult for them to survive.” HOW MUCH DEBT DOES YELLOW HAVE? As of late March, Yellow had an outstanding debt of about $1.5 billion. Of that, $729.2 million was owed to the federal government. In 2020, under the Trump administration, the Treasury Department granted the company a $700 million pandemic-era loan on national security grounds. Last month, a congressional probe concluded that the Treasury and Defense Departments “made missteps” in this decision — and noted that Yellow’s “precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss.” New York City crane collapse linked to company and operator with history of safety violations The government loan is due in September 2024. As of March, Yellow had made $54.8 million in interest payments and repaid just $230 million of the principal owed, according to government documents. Yellow’s current finances and prospect of bankruptcy “is probably two decades in the making,” Chan said, pointing to poor management and strategic decisions dating back to the early 2000s. “At this point, after each party has bailed them out so many times, there is a limited appetite to do that anymore.” In May, Yellow reported a loss of $54.6 million, a decline of $1.06 per share, for its first quarter of 2023. Operating revenue was about $1.16 billion in the period. A Wednesday investors note from financial service firm Stephens estimated that Yellow could be burning between $9 million and $10 million each day. Using a liquidity disclosure from earlier this month, Yellow had roughly $100 million in cash at the end of June, the note added — estimating that the company has been burning through increasing amounts of money through July. “It is reasonable to believe that the Company could breach its $35 mil. liquidity requirement at any moment,” Stephens analyst Jack Atkins and associate Grant Smith wrote. The Associated Press and The Trucker Staff contributed to this report.

WASHINGTON —U.S. trucking firm Yellow has laid off a large number of workers as the company copes with a cash crunch and weighs options including an imminent bankruptcy filing, people familiar with the actions told the Wall Street Journal on Friday, July, 28. The layoffs include members of the company’s sales force, business operations and technology departments, the report said, adding that Yellow’s unionized drivers and freight handlers weren’t part of the downsizing. The third-biggest U.S. trucking company, which has been in ongoing negotiations with union of Teamsters-represented workers regarding worker benefits and pension accruals, averted a threatened strike on Sunday. Yellow has not yet responded to inquiries about the company’s situation. In a memo issued to local unions representing teamsters working at Yellow Corp.’s YRC Freight, Holland, New Penn and Reddaway, Teamsters officials told employees on Friday, July 28, that Yellow’s survival looks “increasingly bleak.” “As we explained in yesterday’s communication, Teamsters National Freight Industry Negotiating Committee and the International Brotherhood of Teamsters have been working hard to help find a solution to fix Yellow’s financial mess and to help it secure financing to enable it to continue in operations,” according to the memo. “While we are continuing to do so, we have no good news to report, and the likelihood that Yellow will survive is increasingly bleak.” The memo further states that “Yellow continues to clear its system, and it appears to be laying off personnel and closing entire terminals across the country. All Yellow employees should, in our opinion, prepare for the worst, as Yellow appears to be headed to a complete shutdown within the next few days. We recommend that all Yellow employees who have personal belongings and tools at the terminals should take them home today. That way, in case Yellow does shut down over the weekend or next week, the employees’ property will not get lumped in with Yellow’s property and get locked up in a bankruptcy or liquidation proceeding that could result in the employees not recovering their personal property.” Reuters contributed to this report.

OVERLAND PARK, Kan. — U.S. trucking firm Yellow is preparing to file for bankruptcy, the Wall Street Journal reported on Wednesday, July 26, as customers abandon the company amid a cash crunch and union negotiations. The company could seek bankruptcy court protection as soon as this week, though no decision has been made, the report said, citing people familiar with the matter. A company spokesman told The Trucker that “Talks with the International Brotherhood of Teamsters are ongoing. As previously stated, in keeping with the fiduciary responsibility of the company’s executives, the company continues to prepare for a range of contingencies.” On Sunday, July 23,, the third-biggest U.S. trucking company averted a threatened strike by 22,000 Teamsters-represented workers after compensating more than $50 million it owed in worker benefits and pension accruals. Its customers include large retailers like Walmart and Home Depot, manufacturers and Uber Freight, some of which have paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier goes bankrupt. In 2020, the Donald Trump led government rescued the company with a $700 million pandemic relief loan in exchange for a 30% stake. The Trucker Staff contributed to this report.

COLUMBUS, Ind. — According to ACT Research’s State of the Industry: U.S. Trailers report, clouds on the trailer-market horizon bear watching, while simultaneously recognizing this is the seasonally weakest time of the year for forward-looking metrics. “As expected, production outpaced orders again in June, dropping trailer backlogs 12% sequentially and 10% year-over-year. Dry van, reefer and flatbed backlogs were down month-over-month, while dumps were higher, as net orders slightly outpaced build in that segment,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research. She explained that “Despite the big sequential drop in trailer backlogs, the seasonally adjusted backlog-to-build ratio shed a modest 20 basis points, to 7.1 months in June from May’s 7.3-month level and 8.5 months from last June. While lower, the current backlog essentially commits the industry into the beginning of 2024.” Regarding cancellations, McNealy stated: “Fleet commitments remained mixed in June. Total cancels dropped to 2.8% of backlog, from May’s 4.2% rate. OEMs are still reporting that most cancellations are coming from the dealer network, although fleet and model-year cancellation-rebooks are being reported as the 2024 orderboards begin to open and slots get pushed.” Conversations with industry stakeholders over the past few weeks “revealed that while they remain relatively optimistic about 2024, there was an acknowledgement of increasingly challenging conditions for customers and dealers,” McNealy concluded.

NEW YORK — UPS reached a contract agreement with its 340,000-person union on Tuesday, July 25, averting a strike that had the potential to disrupt logistics nationwide. “Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” said Carol Tomé, CEO of UPS. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.” The agreement was announced after UPS and the Teamsters came back to the negotiating table to discuss — and hopefully resolve — issues in the largest private-sector contract in North America. Both sides had already reached tentative agreement on a host of issues but remained at odds on things like pay for part-time workers, who make up more than half of the UPS employees represented by the union. The Teamsters called the tentative agreement “historic” and “overwhelmingly lucrative” in a news release. The agreement includes, among other benefits, higher wages and air conditioning in delivery trucks. “Rank-and-file members served on the committee for the first time, so we got to show up every day to support our fellow Teamsters and share their stories,” said Brandy Harris, a part-time UPS Teamster with Local 174 in Seattle and a member of the Teamsters National Negotiating Committee. “Our hard work has paid off — from those members and leaders negotiating for more at the table to my sisters and brothers building a credible strike threat around the country. Our union was organized, and we were relentless. We’ve hit every goal that UPS Teamster members wanted and asked for with this agreement. It’s a ‘yes’ vote for the most historic contract we’ve ever had.” Teamsters General President Sean M. O’Brien said, “Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits. Teamster labor moves America.” O’Brien added: “The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it. UPS has put $30 billion in new money on the table as a direct result of these negotiations. We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor, and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers.” Teamsters General Secretary-Treasurer Fred Zuckerman said UPS came dangerously close to putting itself on strike. “But we kept firm on our demands,” he said. “In my more than 40 years in Louisville representing members at Worldport — the largest UPS hub in the country — I have never seen a national contract that levels the playing field for workers so dramatically as this one.” Highlights of the tentative 2023-2028 UPS Teamsters National Master Agreement include historic wage increases: Existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract. Existing part-timers will be raised up to no less than $21 per hour immediately, and part-time seniority workers earning more under a market rate adjustment would still receive all new general wage increases. General wage increases for part-time workers will be double the amount obtained in the previous UPS Teamsters contract — and existing part-time workers will receive a 48 percent average total wage increase over the next five years. Wage increases for full-timers will keep UPS Teamsters the highest paid delivery drivers in the nation, improving their average top rate to $49 per hour. Current UPS Teamsters working part-time would receive longevity wage increases of up to $1.50 per hour on top of new hourly raises, compounding their earnings. New part-time hires at UPS would start at $21 per hour and advance to $23 per hour. Other provisions include: All UPS Teamster drivers classified as 22.4s would be reclassified immediately to Regular Package Car Drivers and placed into seniority, ending the unfair two-tier wage system at UPS. Safety and health protections, including vehicle air conditioning and cargo ventilation. UPS will equip in-cab A/C in all larger delivery vehicles, sprinter vans, and package cars purchased after Jan. 1, 2024. All cars get two fans and air induction vents in the cargo compartments. All UPS Teamsters would receive Martin Luther King Day as a full holiday for the first time. No more forced overtime on Teamster drivers’ days off. Drivers would keep one of two workweek schedules and could not be forced into overtime on scheduled off-days. UPS Teamster part-timers will have priority to perform all seasonal support work using their own vehicles with a locked-in eight-hour guarantee. For the first time, seasonal work will be contained to five weeks only from November-December. The creation of 7,500 new full-time Teamster jobs at UPS and the fulfillment of 22,500 open positions, establishing more opportunities through the life of the agreement for part-timers to transition to full-time work. More than 60 total changes and improvements to the National Master Agreement — more than any other time in Teamsters history — and zero concessions from the rank-and-file.

WASHINGTON — The Central States Health and Welfare Fund agreed Sunday, July 23, to extend health care benefits for workers at Yellow Corp. operating companies YRC Freight and Holland, averting a strike of Teamsters workers at the freight companies. The strike was slated to begin on Monday, July 24, after Yellow failed to make contractually obligated benefit payments of $50 million to Central States on July 15. According to a Teamsters news release, Teamsters General President Sean M. O’Brien and General Secretary-Treasurer Fred Zuckerman placed “intense pressure” on the companies to come to an agreement. Central States is giving Yellow 30 days to pay its bills with the understanding the company will do so within the next two weeks, the news release stated. “The intense discussions between Teamsters leadership and Central States successfully convinced fund trustees to reverse their previous decision that health care benefits would end on July 23 if Yellow remained delinquent,” the news release stated. O’Brien subsequently ordered the Teamsters National Freight Industry Negotiating Committee to meet in-person with Yellow representatives on Sunday evening. Meetings will take place in Washington, D.C., to review the state of the company and the current contract. “Our members at YRC Freight and Holland cannot work without health care, and the Teamsters worked tirelessly to ensure an immediate strike at Yellow could be averted,” O’Brien said. “These discussions were not easy, but Central States has made meaningful movement under pressure from the union. We are seeking a real resolution, but let this solution today serve as a profound reminder that our members can only endure so many sacrifices. Teamsters at Yellow simply work too hard and have already given so much.” On Friday, July 21, U.S. District Court Judge Julie Robinson of Kansas ruled against Yellow Corp.’s request for an injunction to stop a Teamsters strike. Yellow Corporation executives said that a strike by Teamsters would have violated the parties’ collective bargaining agreement.

KANSAS CITY, Kan. — A U.S. District Court judge in Kansas has ruled against Yellow Corp.’s request for an injunction to stop a Teamsters strike. Senior Judge Julie Robinson issued the order on Friday afternoon. Robinson’s decision will allow Teamsters to strike, possibly as soon as Monday. Teamsters and Yellow officials have been at odds for weeks. Yellow Corporation executives say that a strike by Teamsters would violate the parties’ collective bargaining agreement. In an e-mailed statement released late Friday, Yellow officials said they regret Robinson’s decision. “The company, represented by Marc E. Kasowitz and Ron Rossi, partners at Kasowitz Benson Torres LLP, intends to appeal the ruling,” according to the statement. “The court, recognizing a strike would likely kill the company, resulting in the loss of 30,000 jobs, cautioned the Union — that while it won today’s battle, it could very well lose the war.” The issue came to a head this week when The Central States Pension Fund’s Board of Trustees voted on Monday, July 17, to suspend health care benefits and cease pension accruals for Yellow workers after two Yellow operating companies, Holland and Yellow Freight, failed to fulfill their financial obligations. The complaint Yellow filed against the Teamsters alleges that the Teamsters “breached their binding union contract with Yellow, causing more than $137 million in damages by unjustifiably blocking, for over eight months, Yellow’s restructuring plan to modernize its business, which is necessary to compete against non-union carriers that dominate the LTL business today.” Yellow’s complaint further states that “These modernization efforts, known as One Yellow, are essential to the company’s survival.” In a news release, the Teamsters Union said it “categorically denies the baseless allegations made by Yellow Corporation in its frivolous lawsuit….” “Yellow Corp.’s claims of breach of contract by the Teamsters are unfounded and without merit,” said Teamsters General President Sean M. O’Brien. “After decades of gross mismanagement, Yellow blew through a $700 million bailout from the federal government, and now it wants workers to foot the bill. For a company that loves to cry poor, Yellow’s executives seem to have no problem paying a team of high-priced lawyers to wage a public relations battle—all in a failed attempt to mask their incompetence.” Yellow officials say they “will continue to pursue its breach of contract case where it seeks to recover more than $1.5 billion in lost enterprise value caused by the International Brotherhood of Teamsters.” The Teamsters say they have “diligently adhered to the terms of the collective bargaining agreement (CBA) signed with Yellow Corp., fully honoring its contractual commitments and obligations,” according to the organization’s news release. “The company is misleading our members and the public. We have a contract with Yellow that expires March 31, 2024, and Teamsters are living up to it. Yellow’s management knows they’ve failed this company and their workforce because they can no longer live up to the terms they once agreed to. This lawsuit is a desperate, last-ditch attempt to save face,” said Teamsters General Secretary-Treasurer Fred Zuckerman. The Teamsters went on to say in their news release that the lawsuit by Yellow “is a blatant attempt to undermine the rights of workers and discredit the Teamsters. The Teamsters are fully prepared to defend the union’s position vigorously and utilize all available legal resources to challenge the meritless accusations put forth by Yellow Corp.” Yellow officials say that “without these crucial reforms, which are standard practice in the industry today, Yellow likely will not survive, 30,000 jobs will be lost, including 22,000 union jobs, and its shareholders, including the federal government, which owns 30.1% of Yellow stock, will be severely damaged.” In a statement, Yellow Corp.’s management team said the union’s leadership left them no choice but to sue. “For many months, we have made good faith efforts to meet with the IBT to propose a path forward that works for all parties, but they refuse even to meet, let alone engage in honest talks,” according to the statement. “We have communicated with all stakeholders in Washington, D.C., including the Biden administration, to apprise it of the imminent loss of tens of thousands of jobs, the significant anti-competitive effects on the American economy and the devastating impact to the supply chain, and to seek their assistance in persuading the IBT to negotiate a mutually acceptable agreement. We are fighting for the livelihood of our 30,000 employees who are good hard-working people. We will do all we can to save these American jobs and to protect our shareholders, including the American taxpayer.” The complaint also alleges that O’Brien “orchestrated these breaches and has prevented Yellow from meeting with IBT leadership. For several years, the IBT had endorsed the company’s modernization effort and, in fact, approved the first of the effort’s three phases before the IBT reversed itself taking, in Mr. O’Brien’s words, a ‘militant approach’ to blocking Yellow’s modernization.” Yellow executives say completion of One Yellow in 2023 “is critical to Yellow’s ability to survive, particularly given that Yellow faces, among other things, the imminent need to refinance $1.3 billion in debt — a $567.4 million term loan maturing on June 30, 2024, and a $729.4 million U.S. Treasury loan maturing on September 30, 2024.  Nonetheless, as alleged, the Union has blocked Yellow’s completion of One Yellow, triggering grave uncertainty for employees, investors and customers, and has knowingly intended to cause Yellow’s economic ruin.” Yellow executives claim O’Brien “has taken up the role of public agitator for the company’s demise, recently tweeting an image of a headstone in a cemetery with ‘Yellow’ on it.” Yellow’s statement further said that O’Brien “has continued to hide behind numerous false, unconstructive, and irresponsible social media posts maligning the company, while refusing to discuss a path forward with the company itself.” Yellow officials contend they wouldn’t have had to file suit if Teamsters officials had agreed to “negotiate in good faith.” “Yellow must now take immediate steps to try to save itself,” according to the Yellow statement. “Yellow is entitled to $137.3 million (and counting) for the injury the Union has caused Yellow, and continues to cause Yellow, and in the event of its demise, at least $1.5 billion for the loss in enterprise value Yellow is sustaining as a result of the union’s breaches.”

LONDON — U.S. inventories of diesel and other distillate fuel oils have failed to replenish significantly despite a downturn in manufacturing and freight activity that has so far lasted eight months. Distillate fuel oil inventories amounted to just 118 million barrels on July 14, according to data from the U.S. Energy Information Administration Stocks were 21 million barrels (-15% or -1.15 standard deviations) below the prior 10-year seasonal average and the deficit had narrowed only modestly from 27 million barrels (-19% or -1.65 standard deviations) a year ago. Distillate stocks have increased slightly from last year when they were just 113 million barrels, but otherwise they are at the lowest level for the time of year since 2004. Chartbook: U.S. distillate fuel oil inventories There is not much scope for rebuilding depleted diesel stocks by running refineries harder, shifting them away from producing gasoline, or drawing down diesel inventories in other regions of the world: U.S. refineries were running at 94.3% of their maximum capacity in the week ended July 14, which was 2.2 percentage points above the 10-year average and the highest rate since 2015. U.S. gasoline stocks are also depleted at almost 13 million barrels (-5% or -1.31 standard deviations) below the prior 10-year seasonal average, making it difficult to boost diesel yields at their expense. In Europe, distillate inventories are 30 million barrels (-7% or -0.90 standard deviations) below the seasonal average while the deficit in Singapore is 3 million barrels (-27% or -2.52 standard deviations). U.S. distillate consumption and inventories are both closely geared to the business cycle since more than three-quarters of distillate fuel oil is consumed by trucking firms, railroads and manufacturers. In recent decades, inventories have normally been reset after a period of depletion by a mid-cycle slowdown or a cycle-ending recession, but so far the slowdown has not been deep enough to rebuild them. If the U.S. economy avoids a recession and industrial activity starts to rise, inventory depletion will resume and stocks will quickly fall to critically low levels, putting upward pressure on fuel prices and inflation. Distillate prices and refining margins have already strengthened over the last three months as inventories have remained lower than expected. Futures prices for diesel delivered in September 2023 have risen by more than $16 per barrel from their recent low near the end of April. Prices for diesel have been rising faster than crude with the gross refining margin (the “crack spread”) widening by $10 per barrel over the same period. The actual and prospective tightness of diesel supplies has started to draw interest from hedge funds and other investors. Money managers have increased their combined position in futures and options linked to middle distillates in eight of the most recent 10 weeks by a total of 76 million barrels since May 2. There have been increases in both U.S. diesel (+27 million barrels) and European gas oil (+49 million barrels) over the period. As a result, the combined position is now in the 43rd percentile for all weeks since 2013, up from just the 6th percentile at the start of May. If the U.S. economy avoids recession, this position-building will likely anticipate, accelerate and amplify the rise in distillate margins and prices. Adjusted for inflation, U.S. heating oil prices were close to the long-term average in June (48th percentile for all months since 1990). So far, positions and prices reflect a delicate balance between upside risks from depleted inventories and downside risks from a faltering global economy. But if the economy avoids a recession, diesel prices could escalate relatively rapidly.

BEAVERTON, Ore. — Truckload freight volumes and spot rates held firm in June while contract rates fell to their lowest points in almost two years, according to DAT Freight & Analytics. “The gap between spot and contract rates was the narrowest since April 2022,” said Ken Adamo, DAT’s chief of analytics. “Spot rates for van and refrigerated freight increased for the third straight month, and volumes were almost unchanged from May. These are signs that spot truckload prices have reached the bottom of the current freight cycle.” The national benchmark contract rate for dry van freight has not increased for 12 consecutive months. At $2.58 per mile, the rate was 70 cents lower than a year ago. Volumes held steady in June The DAT Truckload Volume Index (TVI), an indicator of loads moved during a given month, decreased marginally for van and refrigerated (“reefer”) freight and increased slightly for flatbed loads: Van TVI: 230, down 1% from May. Reefer TVI: 167, down 3% from May. Flatbed TVI: 267, up 2% from May. Van, reefer rates improved On the spot market, the national benchmark rates for van and reefer freight rose while the flatbed rate declined compared to May: Spot van rate: $2.08 per mile, up 3 cents, the first increase in five months. Spot reefer rate: $2.47 a mile, up 3 cents. Spot flatbed rate: $2.61 a mile, down 4 cents. Van line haul rates averaged $1.65 a mile, up 4 cents compared to May, while reefer line haul rates averaged $2.01 a mile, up 5 cents. The flatbed line haul rate dipped 2 cents to $2.10 a mile. Line haul rates subtract an amount equal to an average fuel surcharge. Lower diesel prices in June pushed fuel surcharges to 17-month lows, averaging 43 cents a mile for van freight, 46 cents for reefers, and 51 cents for flatbeds. Load-to-truck ratios reflected seasonal demand Load-to-truck ratios reflect truckload supply and demand on the DAT One marketplace: The national average van load-to-truck ratio was 2.6, meaning there were 2.6 loads for every van posted to the DAT One marketplace last month. The ratio was 2.5 in May and 3.9 in June 2022. The reefer ratio averaged 3.8, up from 3.6 in May and down from 7.0 in June 2022. The flatbed ratio fell to 9.7, down from 11.7 in May and 37.6 in June 2022. “Demand for truckload services typically slows at this time of year, but this could change quickly given the threat of strikes in the parcel and less-than-truckload sectors,” Adamo said. “Shippers are putting contingency plans in place and would look to freight brokers and carriers on the spot market to keep their line haul operations moving. Demand for trucks would jump, especially around Louisville, Memphis, Indianapolis, Dallas and other major parcel hubs.”