Yellow’s Shutdown: PNG Worldwide Steps Up to Help Shippers Navigate Rising LTL Rates

The recent and unexpected shutdown of Yellow, a leading less-than-truckload (LTL) provider with a worth of $5.2 billion, has created significant disruptions in the shipping industry. Many small to medium-sized manufacturers and distributors are now desperately seeking alternate LTL capacity to fill the void left by Yellow’s closure.

Particularly, shippers who were moving LTL freight under blanket pricing agreements – provided by resellers of shipping services – are experiencing the most immediate effects. These agreements, which offer a standardized pricing structure encompassing all shipments hauled by a carrier, are commonly favored by transactionally-oriented companies and smaller shippers who lack specific carrier contracts. Yet, with Yellow’s sudden exit, costs under these agreements are projected to soar, causing notable distress in the market.

As well as serving high-volume retailers including Amazon, Home Depot, and Walmart, Yellow had a robust client base of tens of thousands of smaller customers and was a key Department of Defense and government contractor. The immediate rate hikes resulting from Yellow’s closure have hit these small to mid-sized firms hardest. As the market responds to the disruption, LTL rates are expected to rise by high-single-digit to double-digit percentages, with the exact increase dependent on a shipper’s existing relationships and agreements.

Against this backdrop of chaos, many shippers are turning to Logistics Service Providers ( LSP) who utilize state-of-the -art transportation management systems (TMSs) to better manage their carriers.

One LSP stepping up in this challenging climate is PNG Worldwide. The company has long-established contingency plans for situations such as this. Their experienced logistics team stands ready to assist shippers impacted by Yellow’s sudden closure, helping them navigate through this complicated and unpredictable situation offering contingency plans and delivering critical reporting on the potential cost implications of alternate carrier routing. While there is adequate LTL capacity to absorb Yellow’s business, the capacity scenario varies markedly from the truckload sector. The redistribution of LTL freight is predicted to enhance existing carriers’ strength and instill greater pricing discipline.

The biggest disruption from Yellow’s shutdown is being felt in regional markets where Yellow held a strong presence and where freight demand is typically high. Cities such as Atlanta, Dallas, the Midwest, and Southern California are notably affected. Yet, this also opens up opportunities for other carriers. Freight once handled by Yellow is likely to be redirected to Midwest and Pacific Northwest players like Pitt Ohio, Dohrn Transfer, Dayton Freight Lines, and Oak Harbor Freight Lines. Knight-Swift’s LTL network may also see an increase in activity.

The unfolding crisis echoes the fallout following the 2002 failure of Consolidated Freightways, a then $2.2 billion company. In both instances, customers have seen rates rise from a below-market base. Looking ahead, the LTL market is expected to face increased pressure for rate hikes. While some of this will be justified by the sudden market shift, the situation calls for strategic navigation and shippers need all the support they can get. PNG Worldwide, with its well-prepared contingency plans and dedicated sales team, is ready to provide that much-needed guidance.

About PNG Worldwide

Established as a part of the PNG group of companies, PNG Worldwide has over two decades of experience in providing services as a domestic LSP, International Freight Forwarder, NVOCC, and US Customs Broker. We oversee hundreds of millions of dollars of freight services for both our domestic and international clientele, specializing in customized logistics for companies trading non-perishable goods internationally. We believe in a hands-on approach rather than relying entirely on automation, with a focus on individual client needs – a principle we like to refer to as “putting the spotlight on you”.

We take pride in our expertise to ensure your products reach you or your customers in the most secure, seamless, and cost-effective way possible. Our expansive network of agents and carriers, built on contract agreements, allows us to adapt freight transport to suit your requirements and budget. This domestic and international network is continuously assessed and enhanced, with new business alliances being forged regularly for the advantage of our clients.

PNG Worldwide is devoted to practicing business ethically and transparently in all interactions with employees, clients, agents, suppliers, and the wider community. We also prioritize adherence to all relevant laws and regulations, and uphold the highest ethical standards in every facet of our operations.