LTL carrier Yellow Corp. said late Wednesday that it plans to consolidate the operations of its New Penn and Holland regional carriers with its YRC Freight national network as part of a multiyear plan to build a super-regional carrier providing one- to two-day deliveries across the nation.
The Overland Park, Kansas-based carrier (NASDAQ: YELL) said it will combine 22 terminal locations operated by New Penn, Holland and YRC Freight in the East, Midwest and parts of the South. Yellow will also create 35 short-haul velocity distribution centers and will reduce its terminal network by 19 terminals.
New Penn operates in the Northeast, while Holland operates in the Midwest. Operations in the South are an amalgam of legacy networks.
Under the plan, Yellow will create 998 “utility” driver positions that will support the new velocity center operations. The drivers will travel about 175 miles to and from the new distribution centers, Yellow said. This will allow drivers to return home after each tour of duty, Yellow said. Utility drivers will be allowed to work across the three operating companies, Yellow said.
Current New Penn and Holland drivers would become utility drivers. Current drivers essentially perform the same tasks that would be required of the proposed utility drivers. One key difference is that the utility drivers would be paid by the hour, while the current drivers are paid by the mile.
The long-planned announcement is the second phase of Yellow’s three-phase strategy to establish a super-regional carrier operating under the Yellow brand. The carrier plans to go to market with a streamlined model that eliminates duplicative operations while offering an expedited LTL pickup and delivery service.
The changes announced Wednesday would affect 62% of Yellow’s terminal network. The first phase, implemented about five weeks ago, consolidated the Western operations of YRC Freight with Western regional carrier Reddaway. That change affected 26% of Yellow’s terminals. The third and last phase has yet to be announced.
Yellow, a unionized carrier, is required under the National Master Freight Agreement with the Teamsters union to file its “change of operations” with the union.
Under the contract, a company has the right to implement such changes. Management must meet with the union to discuss the proposal, and labor has substantial input into how the changes are executed. However, the Teamsters have little power to block its implementation.
No date has been set for a hearing between the company and the Teamsters to discuss the New Penn, Holland and YRC Freight consolidation. Nor has a date been set for its implementation. Yellow executives are hopeful that the proposal could be implemented by the end of 2022.