Yellow Freight closure thread

I don't understand how the third largest carrier goes belly side up and everyone else is now struggling? All of Yellow's freight should have been gobbled up by the rest of you guys along with a boost in rates. If anything, everyone else should be booming.

 

Problen is volume is dropping faster than capacity is constricting. There was plenty of capacity slack before Yellow failed, so the excess volume was quickly sopped up with minimal hiring, but total daily shipments continue to fall. Can't ship what's not being bought.

 

There was a huge amount of excess capacity in LTL before Yellow went belly up, there wasn't even a blip of a capacity crunch once they stopped. Estes picked up and delivered almost all the freight stuck at terminals and on trailers with no major disruption to their operation.

When the union first threatened a strike two weeks before the operation shut down, over that weekend Yellow lost almost all their national accounts, Wal-Mart, Amazon, the Government, Meijer, Chewy, Crocs, Amor-All and a bunch I am forgetting atm, all of them had strike clauses that allowed them to cancel the contract if a threat of strike or strike action would cause major operation disruption. They all went to other national LTL carriers and it wasn't even a bump in the road for the other carriers to cover it. I think it would take another national carrier and a couple regionals going out before you saw a capacity crunch and actual rate increases that didn't just cause revenue to remain flat.

 

That's terrible to read. I really had no idea that LTL was struggling. Usually a friend of mine that still works at FXF would have something to say about it in a group chat but he's been on the radio silence train for a while. Maybe I should go check on him, I hope he's doing ok. I think by now he'd have 6 years of seniority at FXF on the city board.

 

FXF are going to be an interesting one to watch when they get spun off next year into a standalone company, and how much debt they get put on them by FedEx when they do spin off.

 

With any luck, the ceo of the spinoff won’t be deeply entrenched in the venture capitalist world. Doomed otherwise.

 

FedEx fills out Freight executive team ahead of spin off