It’s a tough day, but one that everyone saw coming for well over a month now — and that was strange to watch. On June 29, we wrote about the potential end and advised our clients to look at other options as it seemed real this time. Many did, and unfortunately, that also expedited Yellow’s decline.
But what was a shipper to do? You couldn’t risk your freight when all the warning signs were clearly going off.
So now what?
There will be countless articles on what went wrong, who to blame, what may happen, etc. Yellow is likely gone as a trucking company and isn’t expected to emerge from bankruptcy. Assets will be sold off, and maybe, just maybe, the capacity may shift to other providers. There was undoubtedly value built in the various entities that made up Yellow. I assume some, even most, will shift to other providers, so we may not see a significant hit to LTL capacity.
However, it appears that some LTL carriers will take advantage of the Yellow situation and raise rates significantly. Some may be warranted, but we’ve seen one specific example of a very well-known top national LTL carrier acting irresponsibly.
On Friday, this particular carrier issued a demand (yes — a demand and not a negotiation) for an 18% increase on a solid piece of business where they were an incumbent for many years. 18%! They said they had to have it in by 8/1, or they would pull every trailer and stop all pick-ups.
This is a terrible example of what may happen — and honestly, a case study of how NOT to do business or foster relationships. I hope they pay for that move dearly. And, by the way, this was not an account with “ugly” freight and didn’t even use Yellow — sad approach.
Rates will go up. But who will it impact? Certainly, those looking for the cheapest rate possible and not looking for good service. But when you remove the #3 carrier, there will be some impact across the board — hopefully not the irresponsible 18% demand, though!