Less-than-truckload (LTL) carrier, Yellow Corp, that filed for bankruptcy last year, is preparing to sell its remaining 112 terminals. This sale process will begin on October 1. The terminals include 47 owned locations and 65 leased properties. The sale is expected to finish by January 2025.
Details of the Sale
The terminals for sale vary in size. Some are small, while others are quite large. One of the largest is in Chicago Heights, Illinois, with 426 doors. Another major facility is located in Bloomington, California, with 325 doors. These properties are expected to draw interest from many buyers.
Starting on October 1, potential buyers can submit nonbinding offers until October 18. After that, binding bids will be accepted from qualified buyers. The funds from these sales will go toward paying Yellow’s remaining creditors, who are still owed a significant amount of money.
Yellow’s Financial Struggles
Yellow Corp. has been dealing with serious financial problems. The company declared bankruptcy in August 2023. Since then, it has raised over $2 billion by selling its equipment and other properties. However, Yellow still has many debts to pay off. The money from the terminal sales will be used to pay unsecured creditors, including pension funds and former employees.
Recently, a court ruled that Yellow must pay withdrawal liabilities for not making payments to employees’ pension plans. These liabilities could total up to $6.5 billion, although Yellow believes it owes closer to $1 billion. The court has instructed the parties to agree on the exact amount.
Impact on the Trucking Industry
Before going out of business, Yellow was one of the largest LTL carriers in North America. Its closure has opened up opportunities for other companies. Competitors like XPO Inc. and Estes Express Lines have already acquired some of Yellow’s terminals. XPO spent $870 million on 26 terminals, while Estes has been a major buyer in the auctions as well.
These companies are expanding their networks with the new terminals, which could reshape the LTL trucking industry. For example, Estes President Webb Estes said in an interview in July that their total number of terminal doors could grow by more than 12% this year.
What’s Next for Yellow Corp
The sale of Yellow’s remaining terminals will mark the end of its operations. The funds raised will help pay off some of the company’s debts, but shareholders are not expected to see much return. MFN Partners, a Boston-based hedge fund, holds a large stake in Yellow but is unlikely to recover its investment.
The sale process is expected to close by January 2025, bringing more clarity to the financial situation. This case will likely set an example for how future bankruptcy cases are handled in the trucking industry, especially when it comes to pension liabilities and employee claims. As Yellow winds down, its competitors continue to grow by acquiring its former assets.
