August 3, 2023

– Full brief here

As we continue to wait for the bankruptcy filing, articles continue to dig into just why Yellow is bankrupt and what it means for the sector, the creditors, shareholders, and workers.

By most accounts, analysts suggest workers affected by Yellow's demise should be able to find work across the rest of the trucking sector. However, that analysis is based on labour market tightness numbers and a continued (overly) optimistic view of the transport sector.

The main gauge of this is transport shipping spot prices. The index indicates that shipping prices continue to fall and are currently back to 2020 levels after the large increase during the 2021-2022 boom in transport.

Massive shifts in transport for home delivery and in how logistic and warehousing companies operate means the job guarantee is far from certain. Also, a union job with all the benefits that come with that is even less guaranteed.

The main focus on this kind of collapse is the hedge fund companies that are circling looking for some part of the spoils should the company liquidate.

There is also the issue of the $700M load given to the company by the USA government under the Trump Administration's corporate bailout. The loan was in exchange for stock and stock holders are the last to see any money in a traditional bankruptcy.

The government might be out that $700M.

Private companies that loaned capital to Yellow will see their money first and this process is being lead by Apollo.

Workers, on the other hand have all been laid-off and their benefits cut. Without finding suitable alternative employment, there is little that they can expect from the collapse. We are still waiting on clarification about even being paid all the company owes them from their self-insurance program.