Estes Express Lines, a top player in the logistics sector has significantly expanded its operational network by acquiring seven former Yellow Transportation terminals. This strategic move underscores Estes’ commitment to enhancing operational capacity and improving service for its customers.

2024 Expansion Overview

In 2024, Estes has achieved a major milestone by increasing its terminal capacity by 508 doors, marking a 4.5% growth from the previous year. The company’s total door count now stands at 11,832, with plans to add 940 more doors within the next nine months. This expansion includes the acquisition of 29 terminals and the assumption of 10 leases from Yellow Transportation. Key new locations include Charlotte, NC; Milwaukee, WI; Minneapolis, MN; Rockford, IL; South Bend, IN; and Eugene, OR.

“These acquisitions demonstrate our ongoing investment in resources to boost capacity and better serve our customers,” said Webb Estes, President and COO. He praised the team for the swift integration of these new assets, which include hundreds of shipping containers and trailers.

Growth of Network and Fleet

The recent acquisition has bolstered Estes’ coast-to-coast network with the addition of 290 new doors. The Charlotte terminal, now the largest in the network with 275 doors, highlights the scale of this expansion. Alongside increasing terminal capacity, Estes has also expanded its fleet, acquiring 6,800 additional trailers this year, bringing its total fleet to over 45,000.

This expansion reaffirms Estes’ commitment to scaling operations and enhancing service delivery, solidifying its position in the competitive logistics and transportation industry.

Source: Commercial Carrier Journal

Image: Commercial Carrier Journal

The post Estes Expands Terminal Network with Seven Former Yellow Locations appeared first on Truck Drivers USA.

“After a company files for Chapter 11, as we all know, employees risk losing their livelihoods, health benefits [and] pensions through no fault of their own. These are things that workers have worked hard for and have earned,” Sen. Klobuchar said during the hearing. “This issue has become relevant in a big way to my state because just last month, Yellow Corp., one of the largest LTL carriers in the country, filed for bankruptcy. This bankruptcy jeopardizes the livelihood and health benefits of many hardworking Minnesotans, including 480 Minnesota Teamsters.”

Melissa Jacoby, the Graham Kenan Professor of Law at the University of North Carolina at Chapel Hill, discussed the purpose of Chapter 11 proceedings during her testimony before the committee, specifically addressing Klobuchar. She emphasized that the primary goal of these proceedings is to facilitate company restructuring while also safeguarding workers and preserving employment opportunities.

“One thing that I worry about is that workers can be used to ask for justification to ask for things that aren’t actually in the bankruptcy code,” said Jacoby, “that this quick sale will save jobs. That agreeing to a loan at a very high interest rate will save jobs, and yet there’s often no guarantee. I think there should be more examination of jobs and the quality of those jobs in that kind of scenario, and we need to look at employment as well as the union context.”

The recent hearing did not focus on Yellow. Instead, it aimed to encourage productive discussions concerning Chapter 11 bankruptcy and various companies, such as Johnson & Johnson and 3M, faced criticism from lawmakers for their past use of Chapter 11.

Following the meeting, the International Brotherhood of Teamsters (IBT) called on Senators Dick Durbin and Bernie Sanders to investigate Yellow Corp.’s bankruptcy proceedings. The IBT urged them to hold hearings before the Senate Committee on the Judiciary and the Health, Education, Labor, and Pensions (HELP) Committee.

The Fall of Yellow

Yellow filed for Chapter 11 bankruptcy on August 6, finally resolving the speculation about its financial troubles. Currently, it is in the process of liquidation, with Estes Express Lines and Old Dominion Freight Line competing to buy its assets with bids over $1 billion each. The current leader is Estes Express Lines with a $1.525 billion bid for 169 Yellow terminals, as stated in court records.

The proceeds from the sale will primarily go to cover Yellow’s outstanding debt of over $2.5 billion. Unfortunately, the Teamsters believe that the quick nature of the process leaves little hope for salvaging jobs through asset acquisition and re-establishing operations.

The Teamsters union has made significant concessions to Yellow since 2009, sacrificing over $5 billion in wages and benefits to support the struggling carrier. However, their resistance to Yellow’s transformation into a more efficient “super-regional carrier” has ultimately led to the downfall of both parties. The Teamsters’ membership at Yellow accounted for roughly half of their overall membership in the industry.

“Yellow is trying to fast track liquidation. Meanwhile, more than 22,000 union workers are out of work after sacrificing more than $5 billion over the past 14 years through wage and benefit concessions, a fact the company would prefer to conceal from the American public and the bankruptcy courts,” said Teamsters General Secretary-Treasurer Fred Zuckerman. “We haven’t had bankruptcy reform in this country for nearly two decades. We need to take this opportunity to right the wrongs at Yellow and prevent them from happening again.”

Yellow has taken legal action against the IBT by filing a lawsuit worth $137 million. The company claims that the delay in implementing Yellow’s business overhaul has resulted in significant losses. Despite filing for bankruptcy, Yellow is still determined to pursue the lawsuit. The company has also stated that the inflexible stance of the union has played a major role in their financial difficulties.

Source: CCJ Digital

The post Teamsters Demand Inquiry into Yellow’s Bankruptcy appeared first on Truck Drivers USA.

The downward trend continued in the preceding months, with a decrease of 3,500 trucking jobs in July and a loss of over 1,000 jobs in June. The implications of this worrying trend are far-reaching and highlight the challenges faced by the industry as it navigates through these trying times.

David Spencer, the vice president of market intelligence at Arrive Logistics, has shed some light on the situation. He attributes the significant decrease in trucking jobs to the Yellow Corp. bankruptcy, which has had a profound impact on tens of thousands of drivers. Spencer warns that more job losses may be on the horizon.

“The key takeaway when considering all of the recent information that has been made available is that trucking conditions are as tough as we thought they were,” he said. “The spot rate remains below the cost to operate a truck, and savings are running out quickly for carriers. It appears the cyclical nature of trucking continues. Looking forward, I expect it to get worse before it gets better in terms of trucking conditions and employment levels. However, as tough as it is to see, capacity leaving the market can be a good thing for those who can survive the current environment. Ultimately, this trend is what will set up market vulnerability, enabling the next inflationary cycle. I’m still predicting this to occur in the later part of the first half of 2024 (Q2).”

After experiencing a rise of almost 61,000 last year, trucking jobs have seen a decrease of 39,500 this year. Looking at the broader transportation sector, employment has dropped by over 34,000 jobs. This year alone, transportation jobs have declined five times, compared to only two times in the past since the pandemic began.

Out of all the subsectors, trucking experienced the biggest monthly decrease, followed by couriers/messengers and rail transport. However, transit/ground passenger transportation saw an increase of 5,500 jobs, leading the way among the subsectors.

The latest numbers reveal that employment in the transportation sector dropped by 10,000 in July. June’s revised numbers show an even bigger decrease of over 19,000 jobs, which is higher than initially reported.

Year to date, transportation employment has seen a decline of almost 30,000 jobs. In 2022, however, overall transportation employment has surged by a remarkable 261,000 jobs.

Wages in the transportation and warehousing sector saw an increase in August. The average weekly earnings for all employees rose by $2.41 to reach $1,119.00. Hourly earnings also saw a boost, going up to $29.37 from $27.92 compared to August 2022. However, for production and nonsupervisory employees, average weekly earnings decreased slightly from $1,049.79 in July to $1,046.83. On a positive note, weekly earnings increased by $1.81 to $27.99 compared to the same time last year.

The economy experienced a significant gain in jobs across all industries, with nearly 190,000 positions added; however, the unemployment rate rose from 3.5% to 3.8%. Specifically in the transportation and material moving occupations, the unemployment rate increased to 5.8% from 5.1% when compared to the previous year.

The latest data from the Bureau of Labor Statistics reveals that the consumer price index has risen by 3.2% over the past 12 months. In July, there was a monthly increase of 0.2%, driven by higher costs in areas such as shelter, gasoline, and food. Excluding food and energy, the index for all other items rose by 0.2%, showing a 4.7% increase over the year.

Source: Land Line

The post Yellow Bankruptcy Leads to Largest Monthly Drop in Trucking Jobs Since 2020 appeared first on Truck Drivers USA.

Unlike most of the 400-plus drivers who had been practicing until the last minute, Istre had not been in a truck for three weeks. He was one of 22,000 LTL drivers employed by Yellow Corp. who were suddenly laid off on July 30 when the company closed its doors after almost a century in business and declared bankruptcy.

Istre had driven a triple-trailer truck for Yellow and its predecessor for 29.5 years. The time off in August marked the longest stretch he had ever gone without being behind the wheel during his nearly 40-year career.

“It’s been hard. It’s been rough,” said Istre, 59, his voice cracking with emotion and his eyes watering with tears as he described the last month at Yellow and the uncertainty that he and 17 other Yellow drivers who qualified for NTDC faced. “You have your ups and your downs.”

Fifteen out of the 18 eligible Yellow drivers participated in the 86th annual event known as NTDC. The remaining three drivers did not compete for different reasons. Two drivers had already found new jobs in the trucking industry, while the third driver needed a medical procedure and decided to undergo it before starting a new position.

The drivers who participated in the event were able to do so thanks to the efforts of several individuals. Two people significantly raised over $30,000 to cover the drivers’ travel and hotel expenses. Additionally, throughout the week, many individuals went out of their way to make the drivers feel welcome.

In the aftermath of the Yellow shutdown, Herschel Evans, a 29-year veteran Yellow driver and trainer from Atlanta, took the initiative to create a fundraiser web page. His goal was to bring attention to the unemployed Yellow drivers and raise funds to cover their hotel accommodations. Before the shutdown, the company had already purchased the drivers’ airline tickets; however, additional expenses needed to be taken care of, and drivers like Istre hesitated to spend $2,000 to $3,000 on travel after losing their jobs.

Evans revealed that Yellow’s former CEO, James Welch, reached out to him. Initially, Welch and his wife donated $10,000 to the fundraising effort, and then just a few days later, they decided to significantly increase their contribution, covering almost 100% of the drivers’ expenses.

“I told him we had come up with a budget of about $27,000 for the drivers to come here, and about 20 minutes later, I got another message from him that he and his wife prayed about it, and they decided to cover the entire $27,000,” Evans said. “A day or two later, after a couple of phone calls, he wired $27,000 to my personal checking account, and he told me to go to Columbus and take care of his drivers. He still considers these guys as his drivers, and he still cares a lot about the NTDC and the drivers that compete here. He thinks the world of the drivers, and he showed it with the serious stepping up to make it happen.”

“I was happy to make a $27,000 contribution for the Yellow drivers who made it to the NTDC,” Welch said in an email. “I always believed in and supported the event. These drivers deserved the chance to go and be with and compete with the best of the best.”

From 2011 to 2018, Welch served as CEO at Yellow. Even during the challenging period when Yellow was facing a shutdown and bankruptcy, the current leaders showed their support by contributing gift cards and other tokens of appreciation to the drivers. Their gesture was a testament to their recognition of the drivers’ unwavering determination to attend the event.

“We put everything together and got the drivers their goodie bags and made sure they got all their expenses covered, and on the night before the competition, we all got together for dinner as a team and had a nice evening together,” Evans said. “The trucking family, led by Mr. Welch, has really stepped up for these drivers so that all of the practice, work, and studying was not in vain because they got to come to the nationals.”

Istre, along with the other competing drivers, were identified as independent drivers in the NTDC program. Despite the company’s sudden closure, he takes pride in his experience with the carrier. He also appreciates the warm welcome he received from the drivers he competed against.

“This is my seventh time at NTDC, and I’m always proud of the company and what I do; the competition, the friendships, it’s a great thing,” he said. “There were a lot of handshakes and pats on the back. It’s amazing. It was just nice to get here and see your friends. We are very grateful to Mr. Welch for his contribution. He really made this all possible.”

Great news for Istre! Just before leaving for Ohio, he received a job offer in the trucking industry. Although it’s not driving the triple trucks he’s used to on Rocky Mountain routes, he’s grateful for the opportunity. Istre is excited to accept a position delivering food products on a daily shuttle between Boise, Idaho, and Salt Lake City warehouses.

“It’s driving, and this will be a bit of a transition. I’ve been driving doubles and triples for 30 years, but I can do this,” he said, adding that he feels grateful to be able to compete at this level and for the new driving position he’s found. “Talking to the 15 of us that got here, I don’t know that it’s sunk in yet for us. But we want to stay in touch with each other and all make sure we’re OK.”

Source: Transport Topics

The post Trucking Community Unites to Support Ex-Yellow Drivers at NTDC appeared first on Truck Drivers USA.

Even before Yellow filed for bankruptcy on Aug. 6, shippers were diverting their freight, resulting in a surge of activity for smaller LTL providers. This trend indicates that the industry is evolving, and customers are seeking alternative options.

One example of this shift is the rise of Saia as a provider of choice. The increase in shipments with Saia may not solely be a result of new business but rather the transfer of customers previously serviced by Yellow.

Yellow’s current freight landscape presents challenges and opportunities for LTL providers. As the industry continues to adapt, it is crucial for companies to remain agile and responsive to meet the changing demands of customers.

LTL providers have experienced an increase in volume following Yellow’s exit from the market. As a result, they are adopting new approaches to handle the additional loads. Shippers may prefer to choose a unionized carrier, according to Sayers. This could explain the volume boosts seen by ABF Freight and TForce Freight.

Meanwhile, multiple carriers are focused on ensuring that their existing customers continue receiving the same service level. The President and CEO of Old Dominion Freight Line, Kevin “Marty” Freeman, assured investors on July 26 that the company will maintain its service capabilities for its current customers.

“We’re not going to do anything to trash our service by taking on too much freight,” Freeman said on an earnings call.

Goldman Sachs analysts have stated that the interim Q3 reports will offer valuable insights into which players in the freight industry are bearing more load than others.

Considering evolving market trends in consolidation helps shippers mitigate the impact of price increases caused by the disruption in LTL transportation, according to industry analysts.

“I think you’re going to see more of that truckload activity, particularly coming from the Midwest going out to the West, going to California, for example,” said United Shippers Alliance Executive Director Gene Graves.

Yellow subsidiaries New Penn and Reddaway have played a vital role in handling consolidated freight for shippers. Their closure had a significant impact on shippers’ ability to consolidate. This affects both independent shippers and those who rely on consolidators.

“Two of the carriers that played a big role in making this happen are no longer around,” Sayers said. “Yellow’s closing has been disruptive because it shut down some of the capacity for consolidations that was there.”

Source: Transport Dive

The post The Changing Landscape of Yellow Freight: New Opportunities for LTL Providers appeared first on Truck Drivers USA.

Darren Hawkins, Yellow’s CEO stated, “It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business. Today, it is not common for someone to work at one company for 20, 30, or even 40 years, yet many at Yellow did. For generations, Yellow provided hundreds of thousands of Americans with solid, good-paying jobs and fulfilling careers.”

Yellow employees have been dedicated to serving customers across America, from big box stores to small family businesses. With thousands of freight professionals, including both union and non-union employees, they have been unsung heroes during the pandemic. They have played a crucial role in delivering goods to every state, keeping our supply chain moving and our economy strong.

“Yellow has been an active and supportive corporate member of the Women In Trucking Association for years,” said Jennifer Hedrick, WIT’s President and CEO. “Yellow employees actively participated in the Accelerate! Conference & Expo, some were volunteers in committee work of the association, and Yellow supported WIT through sponsorships. So many Yellow employees have not only been a part of the Women In Trucking community, but the broader transportation community, and we want to offer assistance in this time of significant transition.”

For any Yellow employee who has been a member of the association before, the organization is offering to extend your membership for six months.

All you need to do is send them an email at admin@womenintrucking.org with some basic information, such as your first and last name, email address, phone number, mailing address, and approximately how long you were a WIT member.

Source: Women In Trucking

The post WIT Steps Up as a Support System for Yellow Employees appeared first on Truck Drivers USA.

After nearly a century in business, Yellow Corp. officially halted the acceptance of new shipment orders on Friday and made its bankruptcy filing public. The company’s operations came to a complete halt on Sunday, with notices sent out to both customers and employees confirming the end of the road.

According to the Wall Street Journal, Yellow Corp. informed the Teamsters union of its intent to file for bankruptcy, solidifying the company’s unfortunate and final chapter.

Yellow and the Teamsters

According to Yellow’s 2022 Annual Report, they had a workforce of around 30,000 employees by the end of December 2022. Out of this number, 24,000 were union employees. The company’s annual report also revealed that salaries, wages, and employee benefits for both union and non-union workers made up more than 50% of the company’s operating costs.

“Today’s news is unfortunate but not surprising,” said Teamsters General President Sean O’Brien in a press release. “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,”

Yellow did not agree with this assessment and in a mid-July press release stated, “Teamsters General President Sean O’Brien has blamed Yellow for failing its workers, but it is the Teamsters’ leadership who has failed the 22,000 Teamsters employed by Yellow as well as the 8,000 non-union employees who may soon become the Teamsters’ collateral damage.

“For many months, Teamsters’ leadership has steadfastly refused to negotiate the company’s long-planned and necessary modernization effort that would enable Yellow, a 100-year-old company, to streamline and strengthen its operations to compete against non-union carriers.”

Investment advisory firm Stifel has recently addressed the ongoing dispute with Teamsters in an email to the investment community. This dispute has had significant implications for Yellow, as it has prevented them from refinancing almost $1.5 billion in debt with upcoming maturities. Stifel has stated in a press release that it is likely that Yellow will file for liquidation rather than reorganization.

A report by Fox Business reveals that a substantial portion of Yellow’s debt, $729.2 million to be precise, is owed to the federal government.

Previously known as YRC Worldwide, Yellow received a $700 million loan in 2020 through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This loan was justified on the grounds that Yellow’s military moves were of national security importance. Out of a total of $735.9 million in national security loans provided by the Treasury to 11 businesses, Yellow received approximately 95% of the total value.

It is worth noting that the CARES Act loan also included a provision stating that the U.S. Treasury would hold a 29.6% equity stake in the company.

Given Yellow’s troubled financial history, the substantial loan they received raised concerns and prompted inquiries from the Congressional Oversight Commission, as previously reported in 2021.

YRC Freight Canada

Unifor Local 4209 has issued a directive instructing its members to stay home and not report to work at YRD+C Freight Canada, a division of Yellow. This action impacts 58 owner-operator truck drivers and 70 company linehaul drivers.

“The news is devastating for our members,” said Don Lajoie, president of Local 4209. “While the bankruptcy process focuses on moving numbers around a page, we have to remember the human impact. There are hundreds of families who are left with very little information right now. The Local and National union are working to keep them informed as the process continues.”

Yellow’s Bankruptcy Outlook

Stifel’s report states that none of the LTL companies that have filed for bankruptcy since 1980 have done so with the intention of reorganizing. Instead, these bankruptcies have resulted in liquidation.

Stifel believes that the Yellow bankruptcy will also lead to liquidation for the following reasons:

• It is unlikely that there will be interested buyers in the LTL industry.
• The potential pool of buyers outside of the LTL sector would be limited.
• The company is in a state of severe distress and its value as a functioning business would be lower than if its assets were sold off.

What this Means for the Market

Stifel analysts predict that Yellow’s freight, which currently consists of over 40,000 shipments per day, will be redistributed among other LTL carriers within the trucking industry.

According to the analysts, most carriers have 20% space capacity, and the closure of Yellow will result in more freight being shifted to carriers that offer competitive pricing. Additionally, long-haul trucking companies will absorb the portion of Yellow’s business that involves long-haul shipments.

Yellow’s Assets

Yellow has a network of 308 service facilities in North America. Of these facilities, 166 are owned by Yellow and 142 are leased. Together, they provide 19,100 freight servicing doors, with the smallest facility having three doors and the largest having 426. The top 10 facilities, ranked by number of doors, have a total of 2,520 doors, with seven owned by Yellow and three leased.

According to a Stifel analyst, there are opportunities for competitors to upgrade to larger facilities and for well-capitalized LTLs to acquire terminals.

Yellow’s fleet consists of 12,700 tractors and approximately 42,000 trailers. At the end of 2022, the company owned 11,700 tractors and leased 1,000. Yellow owns 34,800 trailers and leases 7,200.

In April 2021, Yellow placed an order for 1,222 Peterbilt Model 579s, the largest single-year order Peterbilt had ever received for trucks with the Paccar powertrain, Paccar MX engine, and TX-12 transmission. Yellow experienced growth in the first quarter of the same year, with over 1,100 tractors, 1,600 trailers, and 140 containers being delivered.

A History of Struggles

Yellow, formerly known as RYC, has faced various challenges over the years, particularly in terms of its operations and finances. Here are some key examples:

• In January 2014, YRC Worldwide, the parent company of YRC Freight, sought to borrow $1.15 billion in order to refinance debt.
• In December 2013, YRC attempted to raise around $29 million by selling three million shares of stock to repay over $69 million of upcoming debt.
• In March 2012, YRC was reported to have an “87% chance of default” by Bloomberg Businessweek.
• In August 2013, YRC Worldwide recorded a quarterly loss and had only $219 million in cash, despite being $1.3 billion in debt.
• YRC Worldwide successfully executed a $500 million restructuring plan in order to inject new capital, enhance liquidity, and reduce debt. This included the appointment of a new CEO and board of directors in 2011.
• In January 2010, YRC Worldwide averted potential bankruptcy by engaging in a debt-for-equity exchange with bondholders, securing approximately $470 million in par value.

Attempting to Sell Logistics Branch

Yellow Corporation announced in a press release on July 27th that it is considering selling its third-party logistics broker, Yellow Logistics, Inc. The company is currently in talks with various potential buyers and the discussions are progressing.

Source: Trucking Info

The post End of the Road for Yellow: A 99-year-old American Trucking Giant Calls It Quits appeared first on Truck Drivers USA.

A case in point is the $700 million pandemic loan granted by the Trump Administration to bail out Yellow Corp. Currently hovering on the brink of bankruptcy, Yellow recently found itself relieved of the burden of repaying the taxpayer-funded loan and other financial obligations. Critics argue, however, that a company like Yellow, employing over 30,000 people and 22,000 truckers, should not have qualified for such assistance.

“The $700 million taxpayer-backed loan Treasury made to Yellow, formerly YRC, was a mistake. Based on the oversight work conducted by the Commission, there is no evidence to support Yellow being critical to national security, which means these loans should never have been executed,” U.S. Rep. French Hill reportedly said.

In exchange for a 30 percent stake, the fourth largest trucking company in the U.S. received priority treatment for delivering goods to military facilities. Industry insiders and experts believe, however, that Yellow is currently caught in an economic death spiral. Despite paying $50 million to avoid a strike by the International Brotherhood of Teamsters, the company continues to face financial losses.

Adding to the controversy, the Biden Administration utilized taxpayer funds to support a trucking-based organization. Through the American Rescue Plan law, $36 billion was allocated to the Central States Pension Fund, the same fund that Yellow failed to pay on time. Critics argue that this fund has a long history of mismanagement. In fact, retirement security expert Charles Blahous from George Mason University stated that before recent laws, it was universally understood that private pensions were not the responsibility of taxpayers.

This situation raises questions about government intervention and the allocation of taxpayer funds, while highlighting the challenges faced by the struggling trucking industry.

“The largest private pension bailout in American history — that only benefits a tiny minority of workers — comes thanks to Democrats allowing those who mismanaged pensions to determine whether their funds qualify for taxpayer assistance with no safeguards,” U.S. Rep. Kevin Brady reportedly said.

The struggling Central States Pension would have had to implement significant cuts to the retirement benefits of over 360,000 retired Teamsters if not for these bailouts. While the bailouts may have helped preserve jobs and benefits, the question of who should shoulder the financial burden remains.

As the debate rages on, it becomes imperative to evaluate the consequences and ethics of allowing politicians to channel substantial sums of taxpayer money towards private trucking organizations. By thoroughly considering this issue, we can better understand whether this practice truly promotes the public interest or if it calls for a reevaluation of fiscal accountability.

Source: The Truckers Report

The post Should Politicians Have the Power to Funnel Taxpayer Money into Private Trucking Organizations? appeared first on Truck Drivers USA.

How did Teamsters General President Sean O’Brien respond to this ultimatum? With a resolute message: Go ahead and shut down.

“It is not left for the Teamsters to save this company; we have given enough,” O’Brien said in a June 12 video statement. “What happens next is out of our control.”

Union leaders are often skeptical of companies claiming financial strain. However, O’Brien’s recent statement has shocked those in the trucking industry. Yellow Corp. could actually go bankrupt, resulting in the loss of numerous unionized trucking jobs. This is a company that has narrowly avoided bankruptcy on multiple occasions.

Furthermore, it is unlikely that another union trucking firm will step in to hire the 22,000 affected workers. The number of union jobs in the freight sector has significantly decreased over the years, making them increasingly scarce.

At first glance, it may seem puzzling why O’Brien would let the company shut down without attempting to save the Teamsters jobs. One would assume that any union job is better than none. However, labor experts argue that this decision is not surprising. It signals a shift in the mindset of union leaders like O’Brien and Shawn Fain. They now proudly embrace a more militant approach and refuse to tolerate subpar employment opportunities.

Overall, this shift in union leadership reflects a new era where rhetoric is strong and only jobs that meet the Teamsters’ standards will be accepted.

“There’s a generational shift that’s going on in labor,” said labor and employment lawyer Benjamin Dictor, who counts among his clients Teamsters Local 804, which represents UPS workers and others in the New York City area.

Dictor, emphasized that trucking fleets consider fuel prices as a fixed cost and that labor costs should also be seen as non-negotiable.

“These companies for generations have treated labor as the cost that they can extract their profit from when other costs are more rigid and higher,” Dictor said. “When those costs go up, they look to labor to come down, so that way they can satisfy their investors. One of the things that you’re hearing from Sean O’Brien is that that’s not the case. Some aspects of labor are a fixed cost. If you can’t afford gasoline, you better get the f— out of the trucking business. I think you hear Sean O’Brien saying that if you can’t afford the labor costs, you better get the f— out of the trucking business.”

This summer, it’s not just Yellow that’s clashing with the Teamsters. UPS, one of the largest freight companies in the world, is also engaged in intense negotiations with the union for a new five-year contract. With the current contract set to expire on July 31, UPS employees have even voted to strike if a new agreement can’t be reached.

One key factor that sets Yellow and UPS apart is their financial situations. UPS, with its massive financial resources, has more leverage to secure a favorable contract for its 340,000 employees. In the years 2021 and 2022 alone, UPS reported an impressive net income of $24.3 billion. In contrast, Yellow faced significant losses of around $87.3 million during the same period.

Michael Duff, an expert in labor law, believes that O’Brien would not adopt such a nonchalant attitude if it did not align with the will of the bargaining unit.

“There is a large sense among rank-and-file unionists that they’re simply not going to take it anymore,” Duff said, speaking generally about unionized labor. “Part of what’s going on here is you’ve got people like O’Brien, who are not willing to cooperate in the old way given the urgency of the moment.”

Yellow bankruptcy not set in stone, but more likely without union support

Yellow has overcome various financial challenges in the past 15 years, including a major one in 2009 when they successfully converted a significant amount of debt into company equity. This debt-for-equity swap was approved by the Securities and Exchange Commission and facilitated by the efforts of the Teamsters and lenders.

During the Great Recession, the Teamsters agreed to a 15% wage reduction and waived pension contributions for five years to help Yellow stay afloat. These wage concessions were later extended in the 2014 contract to ensure the company’s survival.

In 2019, Teamsters-represented employees at Yellow secured an 18% wage increase through their contract, a provision that remains in effect today.

The support of both the Teamsters and the federal government played a vital role in Yellow obtaining a $700 million loan from the U.S. Treasury in 2020. However, it seems that Yellow no longer enjoys the same level of support from these entities, which exposes the company to potential bankruptcy.

According to the Teamsters, Yellow has been benefiting from significant wage, pension, and work rule concessions since 2010. If the Teamsters approve the network changes, Yellow employees will receive a $1.77 hourly wage increase, as stated by a Yellow spokesperson.

Neither Jindel nor Chan expect the federal government to intervene and bail out Yellow, nor has the trucking company made any such request. Yellow did, however, reach out to the White House on June 30, urging President Joe Biden to bring the Teamsters to the negotiating table.

“O’Brien does have a point — the Yellow Teamsters have progressively and consistently given up a lot,” Chan said. “At a certain point, it does have to stop. But is a full blown shut down the answer? It’s probably not one that ultimately works out in the best interest of membership.”

Is an imperfect union job better than no union job? That’s the question that’s been on the minds of many in the trucking industry and Dictor suggests that it’s time to reconsider this question.

“It’s like if I told you that the only way that Yellow could stay in business is that they didn’t have brake pads,” Dictor said. “If they couldn’t have those things, should we give up all these trucking jobs simply because they couldn’t operate safely? We would say no, obviously, we need trucks on the road that are operating safely. It’s for our sake, it’s for everybody else’s sake; there are certain costs.

“If that’s what the brake pads cost, that’s what the brake pads cost,” he added. “And if you can’t afford the brake pad, you know, get the f— out of the industry. The same thing is true about labor. We have to stop thinking about labor like it’s something that there can be a compromise on. … If you can’t afford the labor at a cost that allows these human beings behind the wheel of these trucks to live lives where they get to appreciate their families and their life outside of work and be human beings, then get the f— out of the trucking business.”

Source: Yahoo Finance

The post Teamsters Willing to Sacrifice 22,000 Union Trucking Jobs appeared first on Truck Drivers USA.