Less-than-truckload carrier Yellow Corp. saw tonnage turn positive in February for the first time since May 2021. However, depressed comps from a year ago were the primary catalyst.
Yellow’s (NASDAQ: YELL) February tonnage increased 1.3% year over year (y/y), but that was compared to a comp of down 27.4% in February 2022. January tonnage was down 17.2% y/y, following a decline of 15.9% in January 2022.
Shipment counts in each month were off by more pronounced percentages, with the gap to the reported tonnage declines being closed by increases in weight per shipment.
Stacking the monthly comps for the last two years showed Yellow’s tonnage was down 33.1% in January and off 26.1% in February. By comparison, two-year stacked comps for LTL competitors like Old Dominion (NASDAQ: ODFL) and Saia (NASDAQ: SAIA) range from flat to up low-double-digit percentages for the same months.
The massive declines are part of a companywide restructuring wherein Yellow is consolidating its separate operating brands onto the same platform and closing redundant terminals.
The last phase of the overhaul, which seeks operational changes across approximately 70% of the network, was met with resistance from Teamsters, forcing the company to make revisions. Yellow remains hopeful for implementation of the changes no later than April 30.
The end goal is to improve fluidity, lower operating costs and increase yields on the freight the company hauls.
While the carrier has lost almost one-third of its volumes in the process, a nadir may be in sight. Tonnage per day was up 0.5% sequentially from January to February.
Yellow’s revenue per hundredweight, or yield, was up 12.9% y/y in January and 1.4% in February. Both months faced formidable comps to the prior year, with February 2022 seeing yield climb 33.8%.
On a two-year stacked comp, Yellow’s yields (up 38% in January and 35.2% in February) have outpaced the industry significantly, roughly 8 percentage points higher than the closest competitor. However, overall revenue growth for the company has lagged.
Yellow’s revenue per hundredweight in February was flat with January.
Yellow normally books a tonnage decline of approximately 3% from the fourth to the first quarter. On a quarterly call with analysts a month ago, management said it was hopeful to outperform that seasonal change rate. However, management was less constructive on outrunning seasonal changes to the operating ratio, which normally deteriorates 200 basis points over that period.
Yellow booked a 96.6% OR in the fourth quarter, 99% excluding gains on real estate disposals.
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Corneilues Franchez
Yellows problem is its leadership, they are all clueless.
Truckforbucks
No customer service,poor pu and delivery service,poor attitude of their employees ,old equipment,terrible phone system, they have a lot to overcome ….
Steve
The stock price does not reflect that they are done. It was at much lower levels and they are still operating. When the banks call the notes, they might be done. The banks call the shots as they have made super money on interest payments. Yellow calls itself a technology company that owns trucks. Most of the competition is non union and enjoys lower cost and Yellow enjoys lower wages that most other companies. Until they start acting like a freight company letting local terminals contribute to the pot, they will flounder. The decisions made in Kansas City or Nashville do not reflect how the company should be run. Every company has their day in the sunshine and for Yellow the moon is starting to rise.
Trucker chuck
Merging the holland and new penn regional carriers into yellow is why tonnage is down. Prior to yellows mergers both operated in mid to low 80’s operating ratio. Yellow at best in the last 30 years may have operated at 96 %. When you leave freight on customers docks for more than a day or two, customers leave of other carriers. Shame that yellow takes profitable companies and runs them into ground !!
Carl stanoyevic
The worse thing that that ever happened to Yellow was they let Bill Zollars take control. After the Powell families no longer over saw things we employees saw a declining Yellow. Zollars figured out to line his pockets.
Donald Bockheim
Yellow’s bottom dollar needs to come from trucking and not the sale of real estate. This time around relief from the UNION won’t happen , for they’re really nothing left to take. Even know with the financial strife they are in now, they still keep spending money they don’t really have, as in their newest purchase of a dispatch system. Some believe the government won’t let them fail, don’t worry they’ll get most of their money back. Management should have invested more in their employees, that’s where the moneys made.
LouAnn russo
I use to use them for 85 % of our LTL. But over the last 1 1/2 yr. ABF pricing is dominating. So now they are getting the lions share.
T S
With a stock price of $2.38 you can put a fork in them, they’re done. They’ve been done for years.