If the rest of the ongoing bankruptcy process for Yellow Corp. is any indication, the defunct less-than-truckload carrier’s sizable over-the-road equipment portfolio—more than 14,000 tractors and 43,000 trailers—should be transferred to other trucking industry owners in an orderly manner, with minimal disruption to the used equipment market, a leading analyst observed in an Aug. 31 report.
Yellow is currently a case of knowns and unknowns in the U.S. Bankruptcy Court for the District of Delaware, so the equipment question is very wide open as the case winds toward a conclusion in October. The next hearing before Judge Craig T. Goldblatt is scheduled for Sept. 15.
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Known: Rival less-than-truckload carrier, Thomasville, North Carolina-based Old Dominion Freight Line, made the high bid on Aug. 18—$1.5 billion—for the more than 160 cargo terminals of Yellow, which was once the third-largest LTL and formerly No. 6 on the for-hire FleetOwner 500 until it filed for bankruptcy in early August. The bid by ODFL, itself No. 10 on the for-hire FO 500, bested a first $1.3 billion “stalking-horse” offer by Richmond, Virginia-based Estes Express Lines, the No. 11 FO 500 carrier. More and higher offers for Yellow’s real estate may still arrive and might be announced at the Sept. 15 hearing.
Tam added, “Were all that equipment dumped into inventory at one time, the result conjures up images of a piranha feeding frenzy. While it is still very early in the process and there are no guarantees, this approach should help to minimize the negative impact on used equipment values.”
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Tam’s comments on Yellow’s equipment portfolio accompanied a report, from ACT’s latest State of the Industry: U.S. Classes 3-8 Used Trucks, that used Class 8 retail sales faltered for the first time in three months in July, declining 7.8% from June. Average mileage decreased 2%, with price down 5% and age 1% lower compared to the month before. Average volumes did jump 19%, price and age dropped 30% and 3%, respectively, and average miles were flat in July, according to ACT.
“Sales usually dip a percentage point or two in July, so the decrease was in line with but greater than expectations,” Tam said. “Including auctions and wholesales, the total market volume fell 28% [month-over-month] in July. Compared to July 2022, the retail market was 19% larger.”
The monthly ACT report provides the average selling price for top-selling Class 8 models for each of the major truck OEMs: Freightliner (Daimler); Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo).
