I have long been fascinated by the rough-and-tumble trucking industry.
It goes back to my childhood when Time, Leeway, Transcon, Hopper, and Thunderbird big rigs would roll through town and stop for dinner.
By contrast, our local hauler was widely known as Alabam. By that time, Alabam had merged into a host of other carriers with its most notable feature being a rickety third-world fleet and a rundown terminal.
My dad said their informal slogan was, “If you don’t give a damn, ship Alabam. In Arizona’s arid climate, the company could get away with using stake trucks that were not always in the best shape. One day, I witnessed a shipment fall into the roadway.
All of the above-mentioned freight lines no longer exist as the industry was deregulated and routes were opened up to all comers.
The end was often ugly, with sudden shutdowns and the Teamsters Union and its pension fund often getting the blame.
One of the survivors was Yellow, which snapped up competitors like Roadway Express but, over the past decade or so, battled with better-financed nonunion competition that used technology to sidestep price wars and improve efficiency.
One could tell that Yellow was struggling as its equipment looked worn down, and the company never got around to repainting its entire fleet or fully integrating its merged fleet A $700 million loan from the federal government during Covid-19 only prolonged the misery and left taxpayers as a minority owner of a failed enterprise.
Update: Yellow just filed for bankruptcy in Delaware in the largest case involving a trucking company.
Again, the Teamsters will be blamed, despite previous concessions. The union will point to unionized carriers like UPS, which recently agreed to a new contract, and ABF, both solidly profitable. Not every trucker that shut down was unionized. Jevic, a New Jersey carrier whose trucks were a common sight in Delaware, was nonunion and shut down abruptly. Ironically, Yellow owned the company for a time.
To no one’s surprise, one of the side issues stemming from the shutdown of Yellow recently made its way to Delaware.
Freightwaves reported a class action suit was filed here charging the company with violating the federal WARN requirement that requires 60-days notice before layoffs take place.
WARN never worked well in the trucking business. As Yellow went into a death spiral, shippers began moving business to competitors to avoid disruptions. Layoff notices would have only accelerated the process.
Industry experts report enough capacity in the motor freight system to handle Yellow’s tonnage. In Delaware, carriers like Estes, a family-owned company, and more recently, private equity-fuel Saia offer options to shippers.
It appears that Teamsters decided that enough was enough, even if tens of thousands of drivers may no longer pay union dues.
One industry analyst summed up the union’s views to Freightwaves. “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.”
Barring some miracle, Yellow will join the long parade of carriers that only exist in photos and lawsuit filings. – Doug Rainey, chief content officer.