The sale of the remaining 112 freight terminals owned or leased by bankrupt less-than-truckload (LTL) carrier Yellow Corp. is set to kick off on October 1, as revealed in a recent court filing. The auction will offer 47 owned terminals and 65 leased properties, featuring more than 3,100 and 4,000 doors, respectively. The sale process is anticipated to close by January, marking a crucial step in the company’s bankruptcy proceedings.
Starting October 1, nonbinding written offers will be accepted, with submissions due by October 18. After that, binding bids from qualified buyers will be accepted, although the final deadline for these bids has yet to be determined. Among the major properties up for sale is the 426-door, 103.6-acre facility in Chicago Heights, Illinois, the largest of Yellow’s owned terminals. On the leased side, the 325-door, 54.2-acre terminal in Bloomington, California is the biggest on offer.
The sale of these assets is expected to help Yellow pay off remaining unsecured creditors, as a large portion of its secured debts, including the $700 million loan from the U.S. Department of the Treasury, has already been settled. This loan was part of the financial aid provided during the COVID-19 pandemic. Previous auctions of Yellow’s real estate and rolling stock, including tractors and trailers, have already raised more than $2 billion, which went toward repaying secured creditors.
Auctions and Financial Recovery
Yellow has already conducted two rounds of terminal auctions, raising significant amounts through the sale of 128 owned properties and 23 leased terminals. The first auction generated $1.88 billion, while the second brought in $82.89 million. Major carriers like XPO Inc. and Estes Express Lines have benefited from these sales, acquiring terminals and solidifying their market positions in the process. XPO emerged as the top buyer, spending $870 million to acquire 26 properties, while Estes was the biggest spender in the second round of auctions.
Estes President and COO Webb Estes revealed that his company expects its terminal door total to increase by more than 12% this year, bringing their overall number of doors to over 12,750. This expansion is directly tied to the company’s acquisition of former Yellow terminals, which has helped them climb the ranks in the LTL sector.
Yellow’s Mounting Debts and Pension Liabilities
Despite the successful auctions, Yellow’s financial troubles have worsened in recent weeks. A ruling by Judge Craig Goldblatt on September 13 confirmed that Yellow’s estate must pay into employee pension funds. The Central States Pension Fund, one of the most prominent pension funds involved, claims that Yellow owes approximately $5 billion in contributions due to the company’s sudden collapse. Other multi-employer pension funds, along with several Teamsters union locals, are also seeking compensation.
Yellow’s bankruptcy filing in August 2023 followed an abrupt shutdown at the end of July. The shutdown was triggered, in part, by a longstanding labor dispute with the Teamsters, which represented 22,000 of Yellow’s employees. The inability to resolve this dispute caused Yellow to lose customers, ultimately leading to its financial collapse.
Impact on the LTL Industry
Before its downfall, Yellow Corp. was one of the largest LTL carriers in North America, ranked No. 13 on Transport Topics’ Top 100 list of the largest for-hire carriers and No. 3 on the LTL list, behind only FedEx Freight and Old Dominion Freight Line. With Yellow’s exit, XPO Inc. and Estes Express Lines have moved up in the rankings, benefiting from the acquisition of Yellow’s terminals.
As the remaining Yellow terminals go up for sale, the LTL market is likely to continue adjusting to the loss of one of its biggest players. This could reshape the industry landscape, with carriers like XPO and Estes expanding their reach as they absorb Yellow’s former assets.
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