Yellow Corp Terminal Closures: Overcoming Demand Decline &...

Yellow Corp Terminal Closures: Impact on Workforce and LTL Market

Yellow Corp, a major transportation company, has announced plans to close two terminals in Akron and West Chester, Ohio, as part of its ongoing network overhaul.

Yellow Corp, a major transportation company, has announced plans to close two terminals in Akron and West Chester, Ohio, as part of its ongoing network overhaul. The closures will affect over 250 workers across both facilities, with the company intending to offer transfers to “substantially all” employees. This move is a direct result of the One Yellow network transformation, which aims to consolidate and sell smaller terminals in favor of larger, regional terminals and distribution centers.

Yellow Corp’s Response to Falling Demand: Terminal Closures and Employee Transfers

Yellow Corp terminal closures in Akron and West Chester, Ohio, are set to impact over 250 employees as the company aims to tackle the decline in demand within the less-than-truckload (LTL) market. With an overhaul in their network strategy, Yellow Corp plans to consolidate smaller end-of-line terminals into larger regional ones, enhancing efficiency and reducing operating costs.

Details of the Akron and West Chester Terminal Closures

Yellow Corp Truck, Yellow Corp's Response to Falling Demand

The closures will affect 107 workers at the Akron facility located at 3140 Massillon Road and 150 workers at the West Chester facility at 10074 Princeton Glendale Road.

The closures will affect 107 workers at the Akron facility located at 3140 Massillon Road and 150 workers at the West Chester facility at 10074 Princeton Glendale Road. Yellow Corp has reported these closures to the Ohio Department of Job and Family Services. While the company aims to offer transfers to the majority of the affected employees, those who do not accept transfers will face layoffs starting May 28 or within the following two weeks.

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Employee Profiles at the Closing Terminals

Among those based at the Akron facility are 52 city combination drivers and 25 road drivers. The West Chester terminal’s workforce includes 49 city combination drivers and 39 road drivers. These employees were notified of the impending closures back in 2022, according to Yellow spokesperson Heather Nauert.

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The One Yellow Network Transformation

As part of Yellow Corp’s network transformation into a super-regional carrier, the company is closing and selling over two dozen smaller terminals, consolidating them into larger regional terminals and distribution centers. The goal is to have 290 terminals upon completion of the sell-off.

Declining Demand and Financial Impact

Yellow Corp experienced a significant decline in demand during the fourth quarter of 2022, with LTL tonnage per workday falling 25.1% and LTL shipments dropping by 23% year over year. This decline in demand, largely driven by the loss of retail and industrial business, resulted in Yellow posting a $15.5 million net loss for the quarter. However, this was an improvement from the $44.7 million loss reported in the fourth quarter of 2021.

Signs of Potential Recovery

Despite the decline in demand, there are indications that it may have reached its lowest point. The carrier posted an 8% sequential improvement in tonnage from December to January, compared to a historical 1% decline. This suggests that demand may gradually start to recover.

Yellow Corp’s Outlook on the LTL Market

Yellow Corp’s Chief Executive, Dan Olivier, acknowledged that the sequential tonnage declines in November and December were more pronounced than anticipated. However, executive Darren Hawkins remains optimistic about the U.S. LTL market. He believes that the hundreds of thousands of construction jobs expected to be created by federal infrastructure projects will renew competition with the trucking industry for drivers, resulting in opportunities for national carriers with available capacity.

Conclusion

Yellow Corp Trucks Lined Up, Yellow Corp's Outlook on the LTL Market

The Yellow Corp terminal closures in Ohio mark a crucial step in the company’s efforts to overcome the demand decline in the LTL market and transform its network.

The Yellow Corp terminal closures in Ohio mark a crucial step in the company’s efforts to overcome the demand decline in the LTL market and transform its network. By consolidating smaller terminals into larger regional ones, Yellow Corp aims to improve efficiency, reduce costs, and seize new opportunities in the evolving market landscape.

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Strategies for Yellow Corp’s Recovery and Growth

While the Yellow Corp terminal closures are a response to the current decline in demand, the company’s long-term strategy involves adapting to the changing LTL market, seizing new opportunities, and ensuring sustainable growth. Let’s explore some of the key strategies that Yellow Corp may consider implementing in the coming years.

Investing in Technology and Automation

Investing in advanced technology and automation can help Yellow Corp streamline its operations and reduce costs. This may include adopting artificial intelligence (AI) and machine learning tools to optimize route planning, utilizing advanced telematics for real-time tracking and communication, and exploring the potential of autonomous vehicles to improve efficiency and safety.

Expanding Services and Capabilities

To stay competitive in the LTL market, Yellow Corp may consider expanding its service offerings and capabilities. This could involve providing specialized services such as temperature-controlled shipping, hazardous materials transportation, or expedited delivery options. By catering to specific industry needs, Yellow Corp can diversify its revenue streams and mitigate risks associated with fluctuations in demand.

Strengthening Relationships with Shippers

Building strong relationships with shippers can ensure long-term business partnerships and contribute to Yellow Corp’s stability and growth. Focusing on excellent customer service, transparent communication, and flexible pricing models can help retain existing clients and attract new ones. Additionally, Yellow Corp can collaborate with shippers to identify and address their specific pain points, further solidifying their business relationships.

Addressing the Driver Shortage Issue

The ongoing driver shortage in the trucking industry poses a significant challenge for Yellow Corp and other carriers. To tackle this issue, the company can invest in driver recruitment and retention initiatives, such as offering competitive wages, benefits packages, and career development opportunities. Furthermore, Yellow Corp can explore partnerships with truck driving schools and industry associations to attract new talent to the profession.

Environmental Sustainability

As environmental concerns continue to gain prominence, Yellow Corp can position itself as a responsible and eco-friendly carrier. This may involve adopting green technologies, such as electric or alternative-fuel vehicles, implementing energy-efficient practices at terminals and distribution centers, and actively working to reduce carbon emissions throughout its operations.

Final Thoughts

The Yellow Corp terminal closures in Ohio are a pivotal step in addressing the decline in LTL market demand and transforming the company’s network. By adopting innovative strategies, investing in technology, and focusing on sustainability, Yellow Corp can adapt to the evolving market landscape and drive future growth. As the company navigates these challenges, it will be crucial to remain agile and responsive to industry trends and seize emerging opportunities in the LTL market.