LTL Market Wide Open after Yellow Shutdown

Yellow Corp. Shutdown and Its Impact on the LTL Industry:

The recent shutdown of Yellow Corp. is sending shockwaves through the less-than-truckload (LTL) industry. As a long-standing player in the transportation sector, Yellow’s closure has forced its freight volumes to shift to rival companies, significantly impacting the market. Yellow Corp., based in Nashville, Tennessee, ceased operations on July 30 and filed for bankruptcy a week later. With Yellow’s long-standing focus on the LTL segment, including subsidiaries like YRC Freight, this sudden change is reshaping the logistics landscape.

The Gradual Transition:

Despite Yellow’s sudden shutdown, the transition of freight volumes to competing carriers has been gradual. Kevin Day, President of AFS Logistics’ LTL business, confirmed that the LTL sector has the capacity to handle the additional freight. He noted that this shift wasn’t a sudden change but part of a broader, slow-moving process. Yellow Corp.’s shutdown has left many in the industry recalibrating their strategies to accommodate the influx of shipments.

Who is Set to Gain?

TD Cowen’s second-quarter earnings review highlighted that Yellow Corp.’s bankruptcy has dominated LTL sector discussions. The report singled out companies like ArcBest, TFI International, and XPO as well-positioned to absorb Yellow’s freight volumes due to their competitive pricing and operational capacity. However, as these companies adjust to the extra business, there may be an increase in pricing competition within the LTL sector, despite the softer volume environment left by Yellow’s departure.

Yellow’s Shutdown Leads to Market Shifts:

As Yellow Corp.’s assets continue to transition to competitors, LTL carriers like ArcBest, Old Dominion Freight Line, Saia, and XPO have already started experiencing growth. ArcBest, for example, saw a 10% year-over-year increase in shipments per day, while Old Dominion and Saia have also reported steady gains.

The Long-Term Effects:

Looking forward, experts like Uber Freight predict that Yellow Corp.’s shutdown will lead to higher LTL rates and a prolonged adjustment period. As Yellow had accounted for 9% of the market share, its exit will undoubtedly affect pricing and logistics patterns in the coming months. The LTL industry is set for a new chapter, driven by Yellow’s bankruptcy and the shifting dynamics of freight distribution.