August 2, 2023

Navigating the Closure of Yellow

Impact caused by the closure of Yellow and transitioning LTL volumes.
Mechanized pallet jack loading a pallet of plastic wrapped goods into a truck trailer on a covered loading dock

On July 30, 2023, Yellow Corp., previously known as YRC Freight, ceased all operations. Yellow, which operated 333 terminals across North America and employed over 32,000 people, was the third largest Less-Than-Truckload carrier in North America. As of July 30, 2023, Yellow notified its unionized truckers that it was shutting down terminal operations and will be filing for bankruptcy. This impending bankruptcy is on the heels of a controversial $700 million COVID relief bailout loan provided by the US Government. The imminent closure of Yellow has resulted in some uncertainty in the LTL freight market. 

There are three primary expected outcomes as a result of the closure of Yellow: 

Price Increases on Spot Market LTL Rates

It is expected that LTL prices will increase as a result of increased demand amongst LTL carriers. LTL pricing is traditionally more volatile and takes months to react to market changes, however in July 2023, we began to see an uptick in LTL freight prices as a result of uncertainty with Yellow. Yellow was also a low-cost provider and with its elimination, we expect to see average LTL freight pricing to increase. 

Influx of Freight will Increase Service Failures

While carriers work to absorb the excess volume left by the closure of Yellow, we expect to see an increase in service failures amongst other LTL carriers. As history has shown, any time there is a shift in freight capacity, there is also an increase in transit times and other service failures from LTL carriers.

Increased Volume Shift to Smaller LTL Providers

Some analysts believe that the closure of Yellow will benefit the smaller LTL providers. Analysts believe the majority of the Yellow volume will be distributed amongst smaller LTL carriers, as they are often more nimble and will be able to absorb the additional capacity quicker than the national LTL carriers. 

If you have been using Yellow, one way to manage the transition is to work with a 3PL or third party logistics provider. A good third party freight partner can provide you with the expertise to best manage your freight during these uncertain times. 

Evaluate Alternative Freight Solutions

As you transition your LTL freight volume to other providers, utilizing a third party freight broker can provide the additional insight you need to evaluate the best carrier options. Whether the factors influencing decisions are costs, transit times, or service levels, a third party provider will have the knowledge and experience to select the appropriate LTL providers for your unique business needs. 

In addition, a good third party freight provider will utilize the contract carrier spot market to help deliver a higher level of service whilst managing your freight costs.

Provide Up to Date Market Intelligence 

Being involved on a daily basis with LTL freight providers means that a good third party logistics provider has real-time market intel that they will be able to share with you. Good 3PLs monitor carriers on-time performance and will utilize various carrier performance indicators to make carrier selection decisions. 

Explore Opportunities to Consolidate Freight

During this shift in the LTL market, a good 3PL will holistically review your logistics program and explore opportunities to consolidate freight on your behalf. Consolidations, when managed properly, provide better transparency in your supply chain and deliver better service. 

Take the opportunity to reach out to our team to see how we can help you transition your LTL freight volumes. If you need any support with your supply chain, reach out to our team,

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