5 July 2023

The outside world is looking at Yellow Freight and can’t understand how two sides of a negotiation could be so angry with each other that there are some who want to see their own jobs cut and watch the company go bankrupt. It’s been a 15 year road of concessions, give-backs, broken promises, executive bonuses and so on. The workforce has endured let down after let down from the Hoffa Jr. Teamster Slate and upper management. Now, the O’Brien Teamster Slate has breathed new energy into the Rank and File. They believe someone at the IBT really cares about them for once and will do something to end the dark days of Junior Hoffa.

The History

The back story to this disaster called Yellow Freight begins with CEO Bill Zollars. His dream of creating the world’s largest LTL holding company began in 2003 with the leveraged purchase of Roadway, followed by using more leverage (credit) and the purchase of the USF companies (Reddaway, Best Way, Holland) in 2005. Yellow also acquired east coast LTL regional carrier New Penn, and Reimer Express as part of the acquisition of Roadway. Also, Shanghai Transport and a European carrier were purchased with credit. Initially, the companies all operated independently and were doing fine. The Yellow Holding Company was raking in the revenue. The dream shattered during the 2008 Financial Crisis.

Yellow now found itself up to it’s eyeballs in debt and in a down-turned economy. The banks ordered Yellow to consolidate Yellow and Roadway into one company (YRC) and do it in 6 weeks. During a recession! The two companies operated under two completely different logistical systems and freight was lost all over the country. Customers turned to alternative carriers. Revenue tanked.

Big Cuts, Cuts and More Cuts

Yellow turned to the Teamsters union for help. The members took a 15% pay cut, loss of vacation, lunch break time, a substantial (75%) cut in pension contributions and gave the company relief on many of the contractual work rules. This continued for 15 years and the executives couldn’t seem to pull out a profit even with their employees earning less than their non-union competitors. The banks ordered more cuts and consolidation between it’s next day regional carriers (Reddaway, Holland and New Penn) and YRC in 2021. This led to more logistical confusion as all of these carriers also operated under different systems. Next day freight turned into two-day, three-day and even five-day freight. More damaged freight and angry customers. More revenue loss. So, the executives decided to defer health insurance fund payments for four months. During the COVID days! This only led to an even steeper decline in worker morale. Many quit or took retirement. The company then came to Washington and asked for help. They received $700 million in two tranches. The first tranche caught-up the insurance fund and purchased much needed equipment. The second tranche went to…somewhere. We don’t really know.

The Change of Operations

According to the contract, the company is allowed two major Changes of Operations (COO) every year. Yet again, the banks ordered Yellow to consolidate even more. The company came up with a plan to turn Yellow into a “Super Regional” company called One Yellow. A carbon copy of FedEx Freight’s operation. Phase 1 began in the western region with Reddaway and YRC. The COO called for more “Utility” positions and much fewer “Linehaul” drivers. Utility is a classification position under Local Cartage rules of the contract. The Teamsters union allowed the COO to happen, since Utility is a classification under the contract. Many linehaul drivers lost their jobs and many left the company. You see, under the contract YRC linehaul drivers do not work on a dock. A Utility driver does, just like many of the non-union carriers. Only One Yellow drivers were going to do the same work for less money. Thus, the loss of its workforce. The company had the idea to fly drivers from the central and eastern region out west to cover the driver gap. At great expense! Air flight costs, hotels, rental cars and per-diem were paid to these “Travelers” who took the offer to travel to the western region for a few weeks of work.

Yellow then turned to the central and eastern region with Phase 2. It was communicated to all of the workforce that this change had to happen as soon as possible. Time was of the essence! Again, Utility would replace much of linehaul positions. Then, during a regional meeting between the Teamsters and the company, it was pointed out that a Utility driver cannot exceed 175 miles of driving in one direction. The driver can drive up to 175 miles to a terminal, work freight, and return to his/her domicile, with one via en-route. This is acceptable under the contract. The company wanted to use these Utility drivers to cover the miles that would have been covered by linehaul. The first COO proposal was put on hold by the company for a re-write. Then, in late winter of 2023, the company proposed another COO where Utility drivers were changed into “Velocity” drivers. Velocity was a driver position given to Holland 15 years ago during Yellow’s early days of trouble. Holland has operates under “The Hoffa Rules” since 1955. These rules allow for linehaul to work freight on a dock at a closed or dark terminal, with no local cartage workers present. The driver was allowed to drop freight on the dock and pick up freight from the dock. The driver was not allowed to build another trailer load or use his/her freight to do the same. Velocity changed all of that. It was a position for linehaul, made up from whole cloth, because Utility was proving to be too expensive. The union agreed for Holland to use this new position on linehaul as long as certain freight would be designated as Velocity freight.

The Sticky Widget

The problem is, Velocity doesn’t exist in the contract as a driver classification. It was a sweet deal Holland was given by the Teamsters to help the company turn itself around. Yellow doesn’t operate under the 1955 Hoffa Rules, but they want to implement them in the 2^nd COO proposal. The union made it clear, in order to implement a new driver classification, the contract would have to be re-opened and negotiated. That included wages and pension contributions. The Teamsters (IBT) sent surveys out to it’s Rank and File to begin the opening of contract negotiations. The surveys were completed and returned June 26, 2023. Yellow said it would be out of operating capital by the first week of August. Then it said D-Day would be the middle of July. The company took to the airwaves in an effort to discredit the Teamsters. They also filed a $137 million lawsuit against the IBT for not negotiating in good faith. The company’s posturing made it clear, they weren’t going to open the contract early (9 months) and negotiate.

Simple Solutions

The solution is simple. The Change of Operation should implement a mixture of Utility drivers and “Open Turn” linehaul drivers. Holland offers drivers an Open Turn dedicated (bid) run at most of its terminals. These bids would cover the freight at terminals that Utility drivers aren’t t allowed to travel to. These bids are allowed under the contract, but for some reason YRC doesn’t use them. No opening of the contract required. Plus, it can happen post haste! Why can’t anyone see this?

Secondly, if Yellow is so bent on having the 1955 Hoffa Rules nationwide, why not consolidate everyone into Holland, instead of Yellow?

The answer to that goes back decades and we won’t cover the feud between TNT Holland, later USF Holland and the other national LTL carriers during the 1990’s. Suffice it to say, Yellow would rather go out of business than be re-branded as Holland.