In the wake of the collapse of debt-ridden Yellow Corp., shippers around the nation have seen an 8% drop in carrier diversification as they shift their freight to existing logistics partners instead of enrolling new carriers, according to a report from supply chain visibility provider project44.
The change comes after Yellow, the country’s third-largest less than truckload (LTL) company, ceased operations on July 30 and filed for bankruptcy on August 6.
Yellow’s collapse was significant since the company collected some $5 billion annual revenue from an estimated 49,000 shipments per day. But since its failure had been long anticipated, the effects of the disruption were fairly muted as its clients swiftly switched their business to Yellow’s former competitors, market analysts said.
The effects of that switch are now becoming clear, as the percentage drop in carrier diversification is the equivalent of each shipper losing one carrier, project44 said.
But while the change spells good fortune for other LTL carriers gaining new customers, it could also stress their networks. Absorbing the new volume could ultimately snarl the supply chain as carriers struggle to keep up with the added capacity, project44 warned.