31 July 2023•Article
US domestic transport industry disrupted
The US domestic freight industry has faced turbulence over recent weeks, narrowly avoiding the largest single-employer strike in its history set for August 1st, followed by 99-year-old trucking company Yellow Corp. closing its doors on Sunday, July 30th, with view to lay off all of its 30,000 workers.
The US freight industry has faced turbulence over recent weeks, narrowly avoiding the largest single-employer strike in its history as around 340,000 unionized UPS workers held off on strike action from August 1st onwards following a tentative agreement with UPS.
Teamsters union, one of the largest labor organizations with 1.3 million members, of which UPS is the single largest employer, demanded improved working conditions, including heat protections, increased wages, the elimination of a two-tiered employment system, and an end to harassment from managers.
UPS handles roughly 28% of America's shipping, processing around 20 million packages a day. A 10-day strike of UPS workers would have cost the US economy around $5–7 billion.
While a tentative agreement has been reached, the labor agreement is still subject to a ratification vote by more than 300,000 workers.
Meanwhile, 99-year-old trucking company Yellow Corp. stopped operations on Sunday, July 30th and announced that it would lay off all of its 30,000 workers. The once dominant player in the US trucking industry, of which US taxpayers hold 30% outstanding stock following a $700 million loan from the federal government in 2020, had been battling with the Teamster union, representing around 22,000 of Yellow Corp’s workers, to come to a new contract agreement. This morning, the union announced it had been notified of the company’s shutdown.
According to Satish Jindel, president of transportation and logistics firm SJ Consulting, Yellow Corp. only handled around 7% of the nation’s 720,000 daily LTL shipments last year. He advised that there was an 8% to 10% excess capacity in the LTL sector right now, foreseeing that the closure of Yellow shouldn’t cause a significant disruption but may result in higher rates for shippers who depend on LTL carriers since it was the excess capacity that lowered prices. Impact may be seen in the form of rate fluctuations or an impact on expected ‘normal service’ as volume is redistributed across other trucking companies.
At Woodland, we ceased using any known ‘at-risk’ carriers weeks ago to reduce possible risk to our clients’ supply chains and have been working with affected clients on alternative domestic transportation plans. As a result, any quotes provided in recent weeks through our instant online quoting tool, Woodland Online, have not included the services of Yellow or any truckers associated with Yellow, and reliance on UPS has been reduced to volume transferred to alternative carriers. Any clients affected by Yellow Corp. shutdown will be contacted.
If you have any questions or concerns around your North American supply chain, please contact us here.
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