Bankrupt Trucking Company Yellow Auctions Off 75% of Properties

Yellow, which was the third-largest carrier in the U.S. trucking industry at the time of its collapse last summer, held a court-supervised bankruptcy auction to sell off a significant portion of its national network of truck terminals to rival companies.

The auction, which saw participation from about a dozen trucking companies, resulted in the sale of 75% of Yellow’s properties for just under $1.9 billion, The Wall Street Journal (WSJ) reported Monday (Dec. 4).

The remaining properties are expected to be sold in the coming months, potentially fetching hundreds of millions more, according to the report.

This bankruptcy auction dealt a blow to efforts to revive Yellow as a smaller carrier, the report said.

The bid included $1.1 billion in financing and requested creditors, including the federal government, to push back repayment of some debts and accept equity in the new business, per the report.

Yellow’s collapse last summer marked the largest-ever failure of a trucking company in the U.S., according to the report. The company, which had been in operation for 99 years, generated $5.2 billion in revenue last year but was unable to sustain its operations. The closure resulted in the loss of nearly 30,000 jobs.

Yellow’s bankruptcy filing revealed significant debts, including $1.3 billion to secured creditors and over $700 million to the federal government for a pandemic-era loan, the report said. Unsecured creditors, such as pension funds, claim to be owed billions more.

The auction attracted strong interest from trucking companies, as Yellow’s terminals are crucial for the efficient movement of freight, per the report. About 130 properties were sold, with approximately 90% of the terminals acquired by less-than-truckload (LTL) carriers.

XPO, currently the third-largest LTL carrier, secured a bundle of 28 properties, including one of Yellow’s most prized terminals in Carlisle, Pennsylvania, for $870 million, the report said. Estes Express Lines won 24 terminals for $249 million, and Saia acquired 17 properties for $236 million.

PYMNTS Intelligence has found that the trucking industry transports more than 72% of the nation’s freight by weight. Sustaining this network requires the movement of substantial funds to cover costs for fuel, taxes, maintenance, salaries and other expenses, according to “Fast-Lane Finance: Accelerating Payments in the Trucking Industry,” a PYMNTS and Ingo Money collaboration.