Shutdown of Yellow trucking hits 850 Teamsters drivers in metro Atlanta

The carrier, staggered with debt, unloads millions of dollars in shipments to other carriers

The shutdown of Yellow Corp. trucking has meant a shift in millions of dollars in shipments to other carriers, while idling tens of thousands of workers across the country, including about 850 union drivers in metro Atlanta.

The union had been negotiating toward a new contract for the 22,000 members of the International Brotherhood of Teamsters working for Kansas-based Yellow, with health care benefits the key sticking point. While unable to reach an accord on a new contract, the Teamsters had agreed not to strike, but the company was apparently beyond saving at that point.

Yellow has not been able to refinance $1.3 billion in debt, which included a $700 million pandemic-assistance loan it received from the federal government in 2020.

“Today’s news is unfortunate but not surprising,” said Sean O’Brien, Teamsters president, in a statement. “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. This is a sad day for workers and the American freight industry.”

In metro Atlanta, members of Teamsters Locals 728 and 528 were affected by the company’s collapse, according to union officials.

Yellow, which had been created with the merger of a number of smaller companies, had between 7% and 10% of the market, typically charging cheaper rates than many other carriers, according to analysts. Yellow typically moved shipments from a number of customers in each truck, a business known as “less-than-truckload, or LTL.”

As recently as June, analysts said Yellow was the third-largest such carrier.

But Yellow’s demise had been predicted for weeks and the end became clear in recent days as customers shifted virtually all the company’s freight to competitors.

The disappearance of a link in the economic supply chain is often an economically fraught moment. Sometimes customers must scramble to find other carriers. Sometimes goods pile up in warehouses, factories or loading docks.

Analysts said they hope the disruption this time will be minimal, not causing significant delays in shipments. However, since Yellow’s business was built on offering cheap rates, many companies may find their costs rising when they use other carriers.

One, Vinings-based Home Depot, a massive retailer, uses a host of shippers for products and materials, a spokeswoman said Monday.

“We have a large and diverse supply chain with a number of partners, so we’re accustomed to being flexible and agile when there are disruptions,” Sara Gorman said. “This type of flexibility is what allowed us to adapt and move the unprecedented volumes during the pandemic.”

Meanwhile, about 180 other Teamster members Monday were awaiting news about a contract with Republic Services set to expire at midnight.

Workers, members of Teamsters Local 728, had voted overwhelmingly to authorize a strike if talks do not produce a new contract by the end of July with the Phoenix-based company, the second-largest waste-management company.

Last week, the Teamsters reached a deal with Sandy Springs-based UPS, averting what could have been a strike of 340,000 workers. Workers have not voted to approve that agreement, which includes higher wages, more full-time jobs and protections for workers, according to union officials.