How Yellow’s bankruptcy puts pressure on businesses


After last month saw the US narrowly avoid a national UPS strike, it’s no secret it’s been a turbulent time for the shipping industry.

And in the latest blow to SMEs, Yellow Corp, one of the country’s largest trucking firms, ceased operations last week and is filing for bankruptcy after almost 100 years in business.

With the trucking giant accounting for 9 percent of the less-than-truckload (LTL) industry, many are concerned over the impact this bankruptcy could have on the wider supply chain.

While experts don’t anticipate the loss of Yellow to cause a supply chain crisis the magnitude of a UPS strike, for example, businesses should still be prepared for some disruption while rival freight carriers absorb Yellow’s capacity.

One key change businesses should expect is higher delivery costs. With mounting pressure on alternative trucking firms to fulfill orders, increased freight rates should be anticipated.

This is particularly true if no relationships have been built with carriers to secure discounted prices or if switching to a smaller firm where customers can’t benefit from same economies of scale as Yellow’s size and capacity.

And as one of the US’ most cost-effective LTL transport companies, businesses switching from Yellow to a more expensive rival carrier will experience a twofold cost increase.

Naturally, customers should also anticipate longer delivery times during this transitional period. The best approach is for businesses to adopt a comprehensive approach, encompassing both major carriers and smaller freight companies.

Cultivating diverse carrier partnerships empowers businesses to redirect shipments, if needed, and avoid any penalty clauses by initially reviewing the terms and conditions in their carrier contracts concerning service disruptions and alternative arrangements.

With disruption on the horizon, outstanding customer service plays a pivotal role in retaining customers and upholding brand trust. Transparent communication becomes imperative to ensure customers remain well-informed about any modifications to products and services.

Promptly notifying customers of expected delays and offering reassurance will be paramount. Utilize channels such as email newsletters, updated websites, and social media posts can expedite the dissemination of crucial information to customers and enable swift and effective communication in such situations.