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Supply Chain Issues & Higher Prices to Return

shipping titan - Yellow Trucking - ceases operations

If you remember the empty shelves during the Pandemic of 2020, there may be some issues again with stocking shelves in stores.

Hello again, Ken Baxter coming to you from sunny, Las Vegas Nevada and thanks for stopping by. You may have heard that on Monday, July 31, shipping giant Yellow Trucking announced they were ceasing operations in anticipation of filing for bankruptcy affecting over 30,000 jobs nationwide. 

Known for their low freight prices Yellow had become a favorite for retail giants Walmart and Home Depot will certainly find things more challenging until other shipping arrangements can be made. Retailers will surely experience delays as well as paying more to ship their goods which we all know will result in higher prices at the checkout.

teamster union death blow

In June, Yellow reported the Teamsters Union was blocking restructuring and modernization efforts,  which it said were critical for the Company’s survival and ability to refinance about $1.3 billion of debt due to be repaid by 2024.

Rumors of a strike in July by the union resulted in orders being canceled and a further shrinking of incoming revenue. Although the company had averted a strike by 22,000 Teamster represented workers the “death spiral” had  already begun.

Rumors that Yellow was chronically cash-strapped have proven to be true as Yellow was unable to fund employee benefits such as pension and health care. The Teamsters once again threatened to strike if the benefits were not funded; and here we are.

Fortunately, the situation is not completely the same as we experienced at the beginning of the lockdowns and the period of shortages and delays may be shorter.  The specter of higher prices is looming as retailers scramble to find new freight companies and will most surely pass on the higher prices they will be paying on to already weary consumers.  

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