If you’ve worked in the LTL industry for any bit of time, then you know that it’s always changing. Yes, sometimes that means it gets a bit more complicated. Rates adjust. Rules and processes are modified. Despite all this, there is usually one constant – the core LTL carriers we work with. Yet, in 2023, that changed; we saw the departure of the legacy LTL carrier known as Yellow Corporation. 

The closing of such a large and well-established LTL carrier is very rare. The industry hadn’t felt the void of such a large company since Consolidated Freightways closed 20 years prior. So, what happened? Considering Yellow Corporation was the third largest LTL carrier, what happened to all the freight they handled? 

As someone with a career in LTL, I saw this happen in real-time and have directly seen its ripple effects. I can answer some of those questions and share with you my thoughts, experiences, and observations of this impactful event in LTL history. 

The Fall of Yellow Corporation

Yellow Corporation (commonly referred to as YRC) was no stranger to financial turmoil. The company was laden with debt that was worsened with the Great Recession. It almost put them into filing for bankruptcy in 2009. 

A stint of other factors after that didn’t put them in a better position when COVID-19 rolled around in 2020. YRC was granted a $700 million COVID-relief loan by the U.S. government, which it used nearly half of to cover past due payments to healthcare and pensions, payments on equipment and properties, and interest accrued by its other debts. Fast forward to 2023, and that’s where their final chapter began. 

A few months into 2023, YRC and the Teamsters Union engaged in back-and-forth negotiations. YRC wanted to change operational procedures and sought extra funding to help it pay off its debts. Teamsters disagreed with the proposed changes. We saw news articles and hit pieces about the conflict, week after week. It was nearly impossible for the industry to ignore it. 

In July, whispers began of a possible union strike that would effectively halt YRC’s freight network. This was the writing on the wall for many shippers and third-party logistics (3PL) companies. At this point, the hull had been punctured, and water pouring in. Do you stay or do you go? 

YRC and its subsidiaries were promptly disabled from countless TMS platforms. No customer wanted their freight stuck in limbo if Teamsters were to go on strike against YRC. Because of this, YRC saw a sharp decline in freight volume and tonnage. A company that was in financial disarray was now losing its primary source of revenue. 

On July 30^th, Yellow Corporation ceased all operations. The Teamsters had not agreed to the negotiations, and the 11^th hour came and went. So, what now? 

The Aftermath of YRC’s Closing

YRC’s exit affected two parties: shippers using LTL and other LTL carriers. 

For shippers using LTL, they were two buckets: those who had already begun shifting their freight to other carriers in their pricing roster and those unfortunate enough to still have most or all freight with YRC. The latter had a more difficult situation to overcome as they now had to find an LTL carrier to move their freight without paying an arm and a leg. 

For LTL carriers, YRC’s existing freight had to go somewhere, so they had to figure out how to absorb it. Carriers such as Estes, FedEx, and XPO and their capabilities were pushed to their limit, now drinking from a firehose of incoming freight. Volumes increased drastically, and with such a rapid rise came decreased capacity. 

LTL carriers were making the difficult decision to exclude certain shippers in favor of others just to service accounts and keep their networks moving without bottlenecking. This left many smaller shippers stranded with a shorter list of available LTL carriers. 

As carriers became inundated with freight, their operating ratios took a hit, and something had to be done to regain control. A season of atypical general rate increases (GRI) began. LTL carriers needed to remain profitable lest they succumb to a fate like Yellow. 

3PLs and shippers alike started getting notifications from their carrier representatives about rates going up. Shipping LTL got more expensive now that the carriers had to pick and choose who they serviced with their finite capacity. The increased rate structures also priced out shippers that were used to YRC’s competitively priced tariffs or couldn’t stomach the increases.

For many shippers and 3PLs, the immediate aftermath of the Yellow Corporation bankruptcy was unlike any they had previously experienced. 

Now, that’s the long and short of it, but how are things today? Surely, the disappearance of a significant LTL carrier like that would have lasting, irreversible affects. 

Well, yes, but also no. 

The Current Impact of YRC’s Closing

Today the LTL industry has mostly stabilized. YRC’s freight volume has dispersed, and the dust has settled. The LTL carriers have course-corrected their capacity concerns. 

After the YRC bankruptcy, there were also new questions to answer, one of which was “What happens to their assets?” Those went through the bankruptcy courts, but the LTL carriers were eager to get a piece of it. 

The purchased terminals and trailers meant increased footprint and capacity, which can be the difference between being the best and the biggest for LTL carriers. Several carriers bid to acquire the terminals left behind by Yellow Corporation.

Estes Express, a prominent national LTL carrier, was one of the larger victors in the bidding war. As one of Trinity’s carrier relationships, I asked Estes if they could share the impact YRC’s exit had on their company. Here’s what President and COO Webb Estes had to say: 

While LTL carriers, larger shippers, and 3PLs came out in the black or relatively unscathed, others did not. Smaller shippers with all their freight lanes with YRC had no backup plans except to pay increased, non-discounted LTL rates with other carriers or risk their business operations. 

How Did Trinity Logistics Fare?

At Trinity, those first few months after the bankruptcy were interesting! We saw many new shippers start a relationship with us and saw some complications in LTL carrier transit lanes that bottlenecked. Don’t worry, they were quickly resolved. Since Trinity has a broad roster of national and regional LTL carrier contracts in place, our shipper relationships were able to use our rates to course correct from the YRC closure and effectively avoid any critical disruption. 

Is the last time we’ll see an industry-shaking event in the LTL space? Likely not. For now, the industry is stable, and many LTL carriers are growing and reporting profitable earnings. 

In my 10+ years working in the LTL industry at a 3PL, the Yellow Corporation was always a top LTL carrier for us. Seeing them fade into the wind after decades of LTL service was surreal, and I felt sad for the many YRC employees I’ve grown to know. 

Despite such an impactful event, now written in the history books, it’s a year later, and the LTL landscape is still thriving (and volatile), even with one less player at the table. 

Final Thoughts

Considering the size of Yellow and the steady decline until evaporation from the industry, I actually expected more disarray from it. Sure, the first weeks after the bankruptcy had the GRIs, shipment delays, and new shipper partnerships for Trinity to handle, but after a month or two, it was relatively smooth sailing back to normal. 

I think that speaks volumes to the age we live in. The amount of technology and time-saving efficiencies that LTL carriers invest in year after year. It allowed the industry to absorb the freight volume of one of the largest LTL carriers in the world and it did so in less than 60 days! It’s kind of crazy and a testament to the LTL industry and its controlled chaos. 

Working with Yellow for so many years, I grew familiar with some of the names worked there. People we would see at conferences, have calls with or see on emails. People who had been in the industry much longer than I have, had extensive backgrounds, and grew their roots at Yellow. 

The bankruptcy landed them in the middle of it all, but many of them went on to other LTL carriers and took their experience, adding value there. I think that’s a silver lining here. Despite the financial decision of Yellow as a company, it had people on its roster that brought purpose to LTL and now these people are creating an impact for other carriers and customers alike. For how vast it is, the LTL industry can be closeknit, so to see those former Yellow employees succeed at other LTL carriers is a bright spot in this saga. 

ABOUT THE AUTHOR

Curt Kouts holds the Director of LTL position at Trinity Logistics. Kouts has been with Trinity and in the logistics industry for 14 years, having held several titles among carrier vetting, account management, and within the LTL Team itself. His main responsibilities as Director focus on elevating Trinity’s LTL customers’ experience, helping the LTL Team support in operations and billing, and aiding the company in overall LTL sales and success. Kouts finds the LTL industry incredibly challenging, presenting him and his Team a ton of problems that they have a passion for solving. He enjoys learning more about LTL whenever possible and overall, making LTL an experience that keeps all his customers, both internal and external, coming back.

Don’t let your company get caught off guard by CVSA Operation Safe Driver Week, July 7th to July 13th, 2024!

Shippers and carriers, mark your calendars! Operation Safe Driver Week is approaching. While this annual event is designed to make our roadways safer, it’s also a crucial week for those in logistics. This pivotal time can impact operational efficiency for shippers and carriers alike. To be prepared, it’s important for all those involved in shipping freight to understand what Operation Safe Driver Week entails and its effect on the freight market.

• What is the CVSA?
• What is Operation Safe Driver Week?
• Impact on Shippers
• Impact on Carriers
• How Shippers Can Prepare 
• How Carriers Can Prepare 
• Let’s Work Together

What is the CVSA? What is Operation Safe Driver Week?

The Commercial Vehicle Safety Alliance (CVSA) is a non-profit organization dedicated to improving commercial motor vehicle safety through collaboration between law enforcement, industry stakeholders, and the public sector. In partnership with the Federal Motor Carrier Safety Administration (FMCSA), the CVSA launched the Operation Safe Driver initiative in 2007. The goal of this initiative is to reduce the number of deaths and injuries from crashes involving large trucks, buses, and cars.

This initiative includes an annual event, Operation Safe Driver Week. It aims to improve driver behavior through education and increased enforcement efforts, focusing on unsafe driving behaviors. It takes place across North America, so the U.S., Canada, and Mexico. Unlike the CVSA’s other two initiatives (International Road Check and Brake Safety Week), which solely focus on commercial drivers, this event affects all drivers on the road.

Each year has a primary focus with this year’s being reckless, careless, or dangerous driving. This includes actions like: 

• Speeding
• Texting while driving
• Drunk or drugged driving
• Following too closely
• Driving too aggressively
• Improper lane changes
• Failure to obey traffic control devices
• Failing to use a seat belt

Those drivers identified are pulled over by law enforcement and issued warnings or citations.

According to the National Highway Traffic Safety Association (NHTSA), drivers’ actions are the reason behind 94 percent of all traffic crashes. Research from the University of Missouri-Columbia has shown that interactions with law enforcement, not just education, are what brings change. During last year’s event, law enforcement interacted with 66,421 drivers! Drivers were informed and educated on how they can improve their driving behavior and do their part in reducing crashes.  

Why Should I Be Concerned About Operation Safe Driver Week?

It’s important to be aware of when Operation Safe Driver Week takes place because of the impact it has on shipping freight. Even though it’s just one week out of the year, no one likes to be unprepared for potential disruption or delays to their business.

Operation Safe Driver Week Impact on Shippers

Shippers may face potential delays, see reduced transportation capacity, and likely higher spot rates.

Potential Delays

Increased enforcement activity can lead to potential delays due to any road stop inspections or pullovers.

Reduced Transportation Capacity

The increased enforcement effort sometimes leads carriers to strategically choose to close their business temporarily for the week to avoid any risk of fines or penalties. You might find it more difficult to secure reliable carriers for any last-minute shipments.

Higher Spot Rates

With the potential for fewer trucks available and delays, spot rates can be heightened during this time.

Operation Safe Driver Week Impact on Carriers

Carriers are similarly affected, and there is the potential for delays, less freight volume, and higher scrutiny from law enforcement.

Transportation Delays

Just like shippers, carriers should expect to see potential delays in the movement of traffic due to the increased enforcement. This could disrupt your operations.

Fewer Shipments Available

Shippers may choose to plan around this week, reroute certain shipments, or even look into alternative modes. Less freight may be available during this week.

Increased Law Enforcement

Expect to see increased law enforcement, so more eyes will be looking for unsafe driver behavior, and drivers may receive fines.

How to Prepare for Operation Safe Driver Week:

Shippers

Ensure Documentation Accuracy

Double-check all shipment documentation. Ensure it is accurate and complete to avoid delays during any unexpected inspections.

Communicate Sensitive Shipment Needs 

If you have any special requirements or time sensitivities, communicate this well in advance. This helps your logistics provider plan effectively. Any last-minute communication risks delays.

Find Alternatives

Consider alternative transportation modes or routes if you expect any delays.

Keep Customers Aware

Be proactive and communicate potential delays during this week to your customers to manage expectations.

Share Any Concerns

Discuss any concerns you might have with your logistics provider. They can offer valuable insights and help develop strategies to reduce disruptions.

Pricing Awareness

Be aware of possible higher spot rates during Operation Safe Driver Week. When possible, plan shipments before or after this period to secure better pricing.

Carriers

Double-Check Credentials

Ensure all company credentials, like operating authority, hazmat endorsements, TWIC cards, and any other relevant permits, are current and accessible.

Driver Documents are Up to Date

Have drivers verify that all paperwork is up to date and accessible in case of inspection.

Vehicle Maintenance Check

Double-check that all vehicles have undergone any necessary preventive maintenance and are in top operating condition to avoid delays due to roadside repairs.

Prep Your Drivers

Make sure drivers are aware of this week and the potential for stops or delays. Train drivers on proper procedures for interacting with law enforcement. Make sure they know the channels to communicate any disruptions to their journey.

Book Ahead 

Shippers may choose to reroute shipments, choose alternative modes, or plan around this week. Consider booking shipments well in advance for this week.

Remember – Safety First

The importance of this week is not disruptions but road safety. This is a great time to talk with drivers about safe driving behavior. You could also help educate the public on proper driving behavior when interacting with trucks. Remember, this week benefits everyone who shares the road.

Let’s Work Together to Keep Our Roads Safe

We believe road safety is paramount. While Operation Safe Driver Week might cause some temporary disruptions, it serves a vital purpose in promoting safe driving behaviors.

By staying informed and taking proactive steps, you can likely see minimal effects of Operation Safe Driver Week.

For additional opportunities to stay ahead of disruption to your business during Operation Safe Driver Week, consider working with Trinity Logistics. We have over 45 years of experience helping thousands of shipper and carrier companies conquer more complicated shipping situations, like CVSA inspection weeks. We’re confident in our ability to make this week (and all others) a painless one for your business.

Shipping freight is often a large and crucial part of a company. To make a profit, you need to get your customers the right product at the right time, and for the best cost. If not managed properly, your transportation can cost you substantial money. With costs rising recently, it’s easy to see why the challenge for many companies has been to reduce their transportation costs. Are you taking the proper steps to do so?

WHY COSTS ARE RISING

Before we jump into how to reduce your transportation costs, it’s essential to understand what factors are causing them to rise. 

CUSTOMER EXPECTATIONS CONTINUE TO INCREASE

Consumers’ demand for faster delivery times is affecting everything from food and more. It’s forcing shippers to try to keep up to retain their customers. The so-called “Amazon effect” is alive and well as the world of e-commerce and faster shipping times grows. 

HIGHER DEMAND

As noted, e-commerce was growing steadily before, but the pandemic only accelerated it. Consumers are ordering and demanding more, delivered right to their doors. Demand is far exceeding supply, and this trend is expected to continue through the rest of 2021. 

TIGHTER CAPACITY

With such overwhelming demand, there are not enough drivers or labor to keep up. These shortages are impacting every mode of transportation, causing delays, and raising rates higher. 

RISING COSTS FOR DRIVERS

Drivers are also experiencing rising costs. Fuel prices have been increasing, and tolls have risen; truck costs and insurance prices have gone up. All these costs roll over to their trucking rates. 

STEPS TO REDUCE TRANSPORTATION COSTS

There are several ways to reduce transportation costs while also improving your logistics.

CUT YOUR MANUAL PROCESSES

Chances are, you’ve been doing things the same way for so long, you don’t even recognize there’s a better way to do them. We’ve all been there, and while change can be challenging, noticing you have room for improvement is the first step towards growth.

Automating your manual processes will help reduce your transportation costs. With automation, you’ll streamline your operations, allowing for better management while creating and improving your efficiencies. As a result, you’ll end up saving time and becoming available for your more important tasks.

USE ANALYTICS TO IMPROVE OPERATIONS

Reviewing historical records and analyzing trends can help uncover any slow processes and extra costs. For example, you may discover that one carrier consistently adds accessorial charges while another compatible carrier does not.

TRY DIFFERENT MODES OF TRANSPORTATION

Trying different modes of transportation could help you offset your costs. Shipping freight by sea could be less expensive than by air. Intermodal transportation is another option that you may not have considered. Shipping intermodal is usually less expensive than trucking. Even using a combination of the two could reduce your cost. Keep an eye on the transportation costs for different modes and don’t be afraid to make the switch. Being more flexible with your freight shipping could give you some financial benefits. 

SEE IF YOU CAN CONSOLIDATE

Are you making the most of every truck moving your freight? Your shipment planning team should analyze current and future orders to build your shipments in the most cost-effective manner possible. Less-than-truckload (LTL) shipments are cost-effective for smaller weights. Yet, consolidating your shipments into one full truckload could have you seeing savings. With consolidation, there will be fewer trips, meaning you’ll see lower rates on one bulk shipment versus many small ones. 

BID MORE OFTEN 

To offset tight capacity and rising shipping costs, shippers should go out to bid for new transportation contracts more than annually. This allows you to find the best rates and avoid potential disruptions from transportation shortages.

GAIN CONTROL OF YOUR VENDOR-ROUTED OR CUSTOMER-ROUTED SHIPMENTS 

Depending on your customer, sometimes you have your hands tied when it comes to logistics. For example, you may be required to use their specific providers as a condition of doing business with them. However, there are instances where you may be able to gain control of these opportunities for savings. Don’t you wonder about the potential for savings if you controlled this section of your business? 

By leveraging ALL of your volume, you could qualify for some decent savings with LTL and truckload providers. Additionally, you’ll gain control of your shipments, which equals control of the quality of the provider, saving you money by retaining happy returning customers. You can better measure service performance and rates to ensure your best interests are being cared for when the ball is in your court.

INCREASE VISIBILITY 

Without visibility, costs can begin to sneak in like stealth monsters that eat away at your bottom line. True visibility is using a best-in-class TMS that enables you to see all your transportation network. You can track and manage control over your products, see service disruptions or shipment delays in real-time, find optimized routes, and work with the best carriers. You’ll not only reduce your costs but increase your service levels and improve your relationships with all stakeholders. 

PREPARE AHEAD

The more time you have before your shipment gives you more options in carrier selections and the chance to find a decent rate. Or look into another mode, as mentioned earlier. It also gives your provider more time to prepare themselves and let you know of any upcoming circumstances that may increase your logistics costs, giving you more time to consider making any changes. It also helps you alleviate delays and missed deadlines. 

CONSIDER WAREHOUSING SERVICES

If you do a lot of shipping to and from the same lane, especially if it’s over a long distance, it may be a good idea to warehouse your goods closer to your customers so you can reduce those long-haul transportation costs. 

BECOME A SHIPPER OF CHOICE

It’s never a bad thing to be a shipper of choice. Carriers are in the position of choosing which shippers they want to work with. Those shippers who provide better experiences for them can not only reap the benefits of better rates but higher service levels and fewer claims. To become a shipper that carriers will want to work with, it’s important that you run efficient and friendly dock operations, reduce driver wait times, provide comfortable breakroom and restroom accommodations, and pay your carriers quickly. 

GET DATA-DRIVEN INSIGHTS

Data has quickly become one of the world’s most valuable resources. With a best-in-class TMS and proper reporting that you can analyze, you’ll be able to better manage disruptions, reduce downtimes, and effectively plan and budget your logistics spend. By using data analytics, you’ll be able to recognize which carriers are the most likely to have the capacity and ensure proper rates for shipments. 

CONSIDER OUTSOURCING

In business, any activity that isn’t directly tied to securing more business deflects attention away from your goal of making a profit. That means the hours you can spend sourcing transportation providers and managing your logistics are not considered a profitable way to spend your time. By outsourcing your logistics and partnering with a third-party logistics company (3PL), like Trinity Logistics, you gain back all those hours to focus on what you do best – make a profit! 

According to the 2020 Annual Third-party Logistics Study, 67 percent of shippers stated that using a 3PL contributed to reducing their overall logistics cost, while 83 percent said using a 3PL has improved their service. By utilizing Trinity Logistics, you won’t have to worry about any of the steps above because we’ll take care of them for you.

We’re listed as a Top 100 3PL by Inbound Logistics, and through our People-Centric service, we can help you find one or more customized solutions to meet your business needs. The first step to finding out exactly how we can help you reduce your transportation costs and improve your service is by having that initial conversation. 

Will you choose to take that step today? 

Updated September 16, 2021 by Christine Morris.