Trucking giant Yellow Corp. declares bankruptcy after years of financial struggles

Major U.S. trucking company Yellow Corp. has declared bankruptcy following years of financial struggles, despite receiving a $700 million pandemic-era loan three years ago.

Background: Yellow Corp. filed for Chapter 11 bankruptcy, following years of financial difficulties amplified by poor management and strategic decisions.
* Yellow Corp. was previously known as YRC Worldwide Inc. and is one of the largest less-than-truckload carriers in the U.S., employing around 30,000 people nationwide.
* Despite a $700 million federal loan in the pandemic era, the company’s financial situation continued to deteriorate.

Impact on the industry: This development is set to cause changes in the shipping industry.
* Yellow’s former customers and shippers will likely face increased prices as they switch to competitors, due to Yellow’s traditionally industry-low price points.

Financial details: Yellow Corp. has accrued significant debt over the years.
* As of March, Yellow had an outstanding debt of about $1.5 billion, of which $729.2 million was owed to the federal government.
* By this time, Yellow had only repaid $230 million of the principal owed from the $700 million loan and made $54.8 million in interest payments.

What’s next: Yellow has sought permission from the U.S. Bankruptcy Court in Delaware to make essential payments.
* Essential payments include employee wages and benefits, taxes, and payments to certain vendors.
* A congressional probe into Yellow’s loan decision found that “missteps” may have exposed taxpayers to a significant risk of loss due to the company’s ongoing financial struggles.

View original article on NPR

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