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Loaded and Rolling: Yellow exec says bankruptcy coming Monday

Yellow exec to sales staff: Bankruptcy on Monday

(Photo: Jim Allen/FreightWaves)

The saga of less-than-truckload carrier Yellow may be coming to a close based on reporting that Yellow’s senior vice president of sales told staff their last day would be this Friday, and that the carrier would file for bankruptcy on Monday. This follows news of Yellow limiting pickups nationwide on Tuesday, according to a leaked memo. Part of the reason is cash, which Yellow appears to be running out of. A note to investors from financial services company Stephens noted Yellow was burning up to $10 million a day, and that based on earlier cash disclosure, the company could breach its $35 million liquidity minimum at any moment.

The potential impacts of a Yellow bankruptcy appear mixed among earnings comments by publicly traded enterprise trucking companies exposed to LTL. David Jackson, president and CEO of Knight-Swift, noted the opportunity to gain property, stating, “I would say that any opportunity to pick up properties along the way, we would have great interest in that, and I would say that we would be opportunistic there, as we have been prior. There was Central Freight Lines. With their bankruptcy and liquidation, we had an opportunity to pick up some valuable facilities.”

Mixed modal carrier J.B. Hunt was more vague, with CEO John Roberts declining to comment about Yellow’s situation when asked by analysts. But he noted, “[Based] upon the change in certain stock prices [Tuesday], I guess we wish we were perceived to have some sort of benefit from whatever may be happening in the LTL industry.”

Waymo Via hits brakes on autonomous trucking

(Photo: Jim Allen/FreightWaves)

The once crowded field of autonomous trucking companies became smaller with the announcement that Waymo Via, the autonomous trucking unit of Alphabet Inc., is turning its efforts to autonomous passenger cars and ride-hailing services. Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov noted in a blog post Wednesday, “Given the tremendous momentum and substantial commercial opportunity we’re seeing on the ride-hailing front, we’ve made the decision to focus our efforts and investment on ride-hailing.”

This recent departure follows the layoffs at Embark Trucks in March, resulting in a sale in May. TuSimple, another autonomous trucking firm, announced on June 28 it would look at a possible sale of its U.S. operations to focus on China and Asia. FreightWaves’ Alan Adler notes the remaining players in the autonomous trucking space for now are Aurora, Torc Robotics and Kodiak Robotics. 

Not all is lost for Waymo. Adler notes that despite the activity, Daimler Truck CEO Martin Daum remained optimistic for Waymo, telling FreightWaves, “Over the years, we’ve consistently emphasized that autonomous truck development is not a race, but a marathon, and we respect Waymo’s decision to adjust its own timeline. As they shift their focus to ride hailing, we continue to work with our strategic partner Waymo to advance the technical development of the autonomous truck platform.”

Market update: June trailer bookings low, backlogs better, cancellations rise

(Source: ACT Research Co.)

On Tuesday, ACT Research released June trailer data showing production improvements outpacing orders in June. This caused a decline in trailer backlogs by 12% sequentially and 10% year over year. The report notes the backlog improvements were observed in dry van, reefer and flatbed trailers while dump trailer backlogs rose. The total seasonally adjusted backlog-to-build ratio fell 20 basis points to 7.1 months in June, an improvement from 7.3 months in May. Compared to June of last year, the backlog-to-build ratio was 8.5 months. 

Regarding the near-term outlook Jennifer McNealy, director–CV market research and publications at ACT Research, said, “Seasonal expectations suggest orders are likely to remain soft the coming few months, particularly given near record-level order backlogs. Trailer manufacturers normally spend mid-year working down the backlog ahead of the next year’s full orderboard opening.”

In spite of rising cancellations, fleet demand remains, with McNealy adding, “We’re hearing that much of this is a dealer stocking issue, rather than a general decline in fleets’ appetite for equipment. Since backlogs remain relatively healthy, most fleets needing trailers remain in queue.”

FreightWaves SONAR spotlight: DOE/EIA price jumps 9.9 cents in a week

(Chart: FreightWaves SONAR)

Summary: On Monday the Department of Energy/Energy Information Administration average weekly retail diesel price jumped 9.9 cents per gallon to $3.905. Putting the increase in context, FreightWaves’ John Kingston wrote, “In the 10 years leading up to the Russian invasion of Ukraine, the DOE/EIA price exceeded 9.9 cents a gallon for a weekly gain just three times. Two times were at the same time as significant hurricane activity in the Gulf of Mexico; a third was when markets were starting to react strongly bullish in early 2021 to the global economy emerging from the fog of COVID.”

One major contributing factor to the price spike was the ongoing rise in ultra low sulfur diesel (USLD) prices, which Kingston said rose more than 30 cents a gallon between June 28 and Saturday. The DOE/EIA noted that crude oil prices constituted 44% of the total cost in a gallon of diesel as of June. Additionally movements in energy futures markets can impact the cost of diesel, with a major bullish argument for diesel coming from a DOE/EIA short-term energy outlook released July 11.

The DOE/EIA short-term energy outlook predicts a gradual increase in Brent crude oil prices. “We forecast that the Brent crude oil spot price will average $78 per barrel in July. Crude oil prices gradually increase throughout our forecast, reaching about $80/b in 4Q23 and averaging about $84/b in 2024 because we expect that global oil inventories will decline over the next five quarters,” it said.

Capping payouts, combating ‘reptiles’ among ways to defuse nuclear verdicts (FreightWaves)

Surge Transportation blames bankruptcy filing on sales drop after e-commerce boom (FreightWaves)

Pam Transportation sees earnings fall 60% in Q2 (FreightWaves)

NHTSA pressured to overhaul rulemaking on side underride guards (FreightWaves)

Where is DOT’s Freight Office? (FreightWaves)

Legal experts advise revisiting religious accommodation policies following Supreme Court decision (Commercial Carrier Journal)

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