Happy Labor Day weekend—or where trucking is concerned, maybe not so much, as fresh U.S. government numbers out on Sept. 1 show the industry lost 36,700 jobs in August compared to July. One analyst said Yellow Corp., which ceased operations last month, accounts for the bulk of that 2.27% one-month loss.
According to the latest U.S. Bureau of Labor Statistics (BLS) figures, truck transportation accounted for about 1.57 million jobs in August. But that sector of the U.S. economy had more than 1.6 million positions the prior month. The job losses in trucking ran counter to the news that U.S. employers added 187,000 jobs in August, which analysts deemed a steady pace of hiring, though the nationwide jobless rate unexpectedly jumped to 3.8%.
When warehousing, a component of the trucking industry, is included with transportation, the BLS job-loss number last month is about the same: a dip of 34,200 positions, so Yellow still factors as the prime culprit. Warehousing and transportation together—including air, rail, and water—accounted for about 6.68 million U.S. positions in August compared to almost 6.71 million in July, according to BLS.
"The great majority of those lost jobs were due to Yellow," Avery Vise, who keeps close tabs on carrier and employment data and industry trends as VP of trucking for FTR Transportation Intelligence, told FleetOwner. He pointed out that at least 5,700 positions were lost from trucking operations other than Yellow and that there was bound to be some variation based on seasonally adjusted data.
"In most years, trucking adds a modest number of jobs in August on a not seasonally adjusted basis," Vise added. "One thing I definitely can say is that on a not seasonally adjusted basis, trucking lost more jobs than just Yellow."
The August plunge in trucking jobs mostly attributable to Yellow was the third largest on record following the April 2020 contraction (84,500 jobs) and a temporary strike by the International Brotherhood of Teamsters (IBT) in April 1994 (49,700 jobs), Vise wrote in a Sept. 1 proprietary report, State of Freight Insights, that FTR sends weekly to clients. In the report, Vise makes sure to also note the loss of 5,700 trucking jobs outside the Yellow layoffs.
"We would not expect many former Yellow employees—at least not drivers or dockworkers—to make their way into truckload or non-LTL segments, at least not immediately," the weekly FTR update adds. "The net effect of Yellow’s departure on LTL employment data will remain inconclusive at least until the September data released in November because the mid-August data collection did not provide enough time for other LTL carriers to absorb former Yellow workers, assuming they choose to do so. Realistically, though, that process likely will take months."
The update also adds: "The scope of August’s job loss implies that the BLS data collection that occurred in mid-August captured all terminated Yellow employees, although we cannot be certain. The Yellow shutdown clouds an analysis of the August trucking jobs data, but the rest of the industry apparently shed a significant number of jobs."
Not a Labor Day to celebrate for former Yellow employees
Once the third-largest U.S. less-than-truckload and No. 6 carrier on the FleetOwner 500: Top For-Hire Fleets of 2023, Yellow ceased operations early last month and pink-slipped about 30,000 truck drivers, dockworkers, dispatchers, and other personnel nationwide, both union and non-union.
Yellow had been attempting to complete its third financial restructuring in 15 years, One Yellow, but as the company filed for bankruptcy on Aug. 6, its top executives blamed the Teamsters for standing in the way of the restructuring and, ultimately, for the company's demise.
"Today, it is not common for someone to work at one company for 20, 30, or even 40 years, yet many at Yellow did," Yellow CEO Darren Hawkins said in the bankruptcy announcement. "For generations, Yellow provided hundreds of thousands of Americans with solid, good-paying jobs and fulfilling careers."
"All workers and employers should take note of our experience with [the IBT] and worry," Hawkins added. "We faced nine months of union intransigence, bullying, and deliberately destructive tactics. A company has the right to manage its own operations, but as we have experienced, IBT leadership was able to halt our business plan, literally driving our company out of business, despite every effort to work with them."
The Teamsters did not let Yellow's bankruptcy filing go quietly, however.
"Yellow may try to use the courts to eradicate its financial responsibilities, but they can't escape the truth," Teamsters General President Sean M. O'Brien countered. "Teamster families sacrificed billions of dollars in wages, benefits, and retirement security to rescue Yellow. The company blew through a $700 million government bailout. But Yellow's dysfunctional, greedy C-suite failed to take responsibility for squandering all that cash. They still don't. They shamelessly pin their corporate incompetence on working people. This is what's wrong with Big Business."
The union, which represented about 22,000 of Yellow's employees and, along with American Trucking Associations (ATA) and others, is helping those displaced workers with job transition assistance, had threatened a July 31 strike after the company said it would miss pension and health care benefits payments. But a walkout was averted after the company received a 30-day extension to make the many millions of dollars of payments. All of that maneuvering was wasted, however, as most of Yellow's customers had fled by the time the company called it quits and filed for Chapter 11.
When ATA's transition help was announced, ATA President and CEO Chris Spear said: "Our message to former Yellow employees is that we want them to remain a part of the industry that they have done so much to build and strengthen."
Much still to be settled before the bankruptcy court
Aside from new jobs for former Yellow employees, a lot still hangs in the balance as the company's dissolution heads to another scheduled hearing, this one on Sept. 15, before Judge Craig T. Goldblatt in the U.S. Bankruptcy Court for the District of Delaware.
Rival less-than-truckload carrier, Thomasville, North Carolina-based Old Dominion Freight Line made the high bid on Aug. 18—$1.5 billion—for Yellow's more than 160 freight terminals, where many Yellow cargo-handlers worked. The bid by ODFL, itself No. 10 on the for-hire FO 500, bested a first $1.3 billion "stalking-horse" offer for the expansive real estate from another rival LTL, Richmond, Virginia-based Estes Express Lines, the No. 11 FO 500 carrier. More and higher offers for these Yellow holdings might still arrive and be announced at or after the Sept. 15 hearing.
The used-equipment market is bracing for the sale of Yellow's roughly 12,700 tractors (about 1,000 of them leased) and 42,000 trailers (of which 7,200 are leased). "Were all that equipment dumped into inventory at one time, the result conjures up images of a piranha feeding frenzy," ACT Research VP Steve Tam said Aug. 31 in ACT's monthly report on used-truck sales, observing that a frenzy is not likely to occur since Yellow's bankruptcy was proceeding in an orderly fashion.
The question of which entities are funding Yellow's journey through bankruptcy has largely been settled. Two firms, Citadel and MFN Partners Management, the investment firm that owns more than 40% of Yellow's equity, teamed up to seed the process with $142.5 million to help fully wind down its operations.See also: Can smaller fleet operators gain any of the freight left by Yellow?
Yellow has more than $1.5 billion in debt and, by other estimates, could be on the hook for as much as $6.5 billion in employee pension obligations that may not be satisfied once the Delaware bankruptcy case is settled. A committee of unsecured creditors comprised of the union, its affiliated Central States Pension Fund, and Pension Benefit Guaranty Corp. was formed to champion the pension obligation, so the union might still have some say during the proceedings this month.