Yellow Corp.

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Yellow Corp.

founded: 1924

Contact Information:

headquarters: 10990 roe ave.
overland park, ks 66207 phone: (913)696-6100 fax: (913)696-6116 toll free: (800)610-6500 email: [email protected] url:


Yellow Corp. is a less-than-truckload (LTL) freight carrier that offers regional, national, and international freight transportation services. Compared to heavy truckload freight, which typically fills an entire truck, LTL freight weighs less than 10,000 pounds. In addition, while heavy truckload freight is hauled directly from sender to receiver, LTL freight is usually transported to one or two sorting terminals before reaching its final destination.

The largest LTL freight company in the United States, Yellow Corp. is a Fortune 500 company with more than $3 billion in annual sales. Yellow Corp.'s largest subsidiary, Yellow Transportation, serves more than 300,000 corporate clients with a fleet of roughly 8,400 tractors and 36,300 trailers. Yellow Transportation offers traditional freight transportation services, such as next-day delivery, as well as a variety of premium services. For example, time specific delivery services allow businesses to choose both the time and date they would like to receive shipments. In addition, online tracking services allow clients to monitor the movement of their freight via the Internet. Another subsidiary, Duluth, Georgia-based Saia Motor Freight, offers both overnight and next-day delivery services to its 98,000 customers via 1,900 tractors and 6,200 trailers. With 10,000 customers and a fleet of 1,400 tractors and 2,800 trailers, Jevic Transportation, headquartered in Delanco, New Jersey, is the third largest unit of Yellow Corp.


Following two years of significant growth in 1999 and 2000, Yellow Corp. saw weaker sales and profits in 2001. Sales fell 8.7 percent from $3.588 billion to $3.276 billion, while earnings dropped 77.5 percent from $68 million to $15.3 million. The poor performance was mainly due to the general economic downturn in North America, which undercut demand for most trucking companies. High fuel prices also eroded profits. Yellow Transportation accounted for 76 percent of Yellow Corp.'s total revenues in 2001, while Saia Motor Freight secured 15 percent, and Jevic Transportation brought in the remaining 9 percent. Between March 2001 and March 2002, stock fluctuated from a low of $15.50 per share to a high of $27.57 per share.


Between 1998 and 2002, Fortune magazine ranked Yellow Corp. as one of America's most admired companies, placing the firm first it its category for both "Innovation" and "Quality of Products and Services." However, despite favorable reviews such as this one, Yellow Corp. found itself vulnerable to the North American economic downturn of the early 2000s. In 2001, the firm's daily load volume fell 13 percent to its lowest level since the mid-1980s. Share prices dropped as a result, and industry analysts were mixed in their analysis of Yellow Corp. stock. Some pointed out that the stock, like the that of other leading freight movers, was simply a reflection of a temporarily weak economy; as such, it would likely rebound as economic conditions improved. Other analysts expressed concern that Mexican truckers, who were expected to gain access to the U.S. market in mid-2002, would undercut the prices of freight haulers like Yellow Corp. Along with unstable fuel prices, these new low-cost competitors could pose problems for the firm even in robust economic times.

One area that still offers room for growth, according to most industry experts, is Internet-based logistics, which is essentially the use of Internet technology to coordinate all aspects of freight shipping, from ordering and pick-up to payment and delivery. This bodes well for Yellow Corp. According to AMR Research analyst Chris Newton, as quoted in a June 2001 issue of InternetWeek, Yellow Corp. "has a head start on most of its competitors in terms of technology deployment. They have invested more dollars in e-business than most carriers, and they're now at the forefront of the new wave of logistics and transportation services coming to the industry."


Yellow Cab franchise operator A.J. Harrell created the Yellow Transit trucking company in 1924. Based in Oklahoma City, Oklahoma, the new firm started out by offering short-run LTL shipping services to and from Tulsa, Oklahoma. By the mid-1940s, Yellow Transit was overseeing more than 50 small units, many of which were located in the Midwest.

Larger trucking firms started to replace smaller, independent operations in the late 1940s. The increased competition from these more efficient operators, along with the rising costs associated with leasing trucking equipment, forced Yellow Transit into bankruptcy in 1951. George E. Powell and a team of investors bought the firm from Harrell and began to restructure operations. By the end of the following year, Yellow was once again operating profitably. The firm purchased Michigan Motor Freight Lines in the late 1950s, and sales grew to $15 million. In 1965, Yellow doubled its size when its paid roughly $13 million for Watson-Wilson Transportation System. The following year, the firm changed its name to Yellow Freight System, Inc. With sales in excess of $200 million in 1969, Yellow was the third-largest trucking company in the United States.

Yellow began to embrace computer technology in the early 1970s when it installed its first computerized monitoring system in the Kansas City-based command center. The system greatly enhanced Yellow's ability to accurately track each shipment and improved communications, not only within the company but also with clients. The mid-1970s were marked by a series of acquisitions designed to expand the firm's geographic reach. Purchases included Adley Express, Republic Freight Systems, and Braswell Motor Freight. In 1976, Yellow diversified from trucking into oil when it invested roughly $4 million in Overland Energy Company; however, Overland racked up $60 million in losses by the end of the decade, prompting Yellow to refocus on its core freight hauling operations.

The deregulation of the U.S. trucking industry in 1980 caused a series of problems for Yellow. For example, Yellow had made roughly $34 million per year from trucking companies willing to pay fees to use its routes. When deregulation eliminated restrictions on truck routes, Yellow saw this portion of its revenues simply disappear. In addition, increased competition from rivals like Consolidated Freightways and Roadway Express cost Yellow market share in the early 1980s. As a result, the company reduced its workforce by 20 percent. In an effort to strengthen its position, Yellow upgraded its facilities with new technology in 1983. To increase efficiency, the firm added new sorting centers (facilities at which packages are grouped together by destination location and loaded onto the appropriate trucks). Yellow also increased its number of terminals to 600. In 1987, Yellow expanded into Alaska by establishing a terminal there.

International expansion began in the early 1990s as Yellow moved into Canada, Puerto Rico, and Mexico. Yellow Freight Mexicana was created in 1991. The following year, Yellow paid $24 million for regional and interregional LTL hauler Preston Trucking Company, gaining access to regional markets in the northeastern and southern states. Yellow Freight restructured as a holding company for its subsidiaries in 1993; the new holding company changed its name to Yellow Corp., of which Yellow Freight remained the largest unit.

A one-day strike by the Teamsters Union in April of 1994 cost Yellow Freight $7.9 million in net sales. To resolve the dispute, Yellow Freight agreed to a 5 percent wage increase for its employees, most of whom were represented by the union. Growth continued in the mid-1990s with the purchase of Phoenix, Arizona-based regional hauler Johnson's Freightlines. Yellow Corp. changed the name of its new unit to WestEx, Inc. and shifted its focus to providing overnight and two-day delivery services. In 1997, Yellow Freight reorganized operations along geographic lines and laid off 70 administrative employees. As a result, the firm achieved profitability for the first time in three years.

FAST FACTS: About Yellow Corp.

Ownership: Yellow Corp. is a publicly owned company traded on the NASDAQ Stock Exchange.

Ticker Symbol: YELL

Officers: William D. Zollars, Chmn., Pres., and CEO, 54, 2001 base salary $700,000; Donald G. Barger, Jr., SVP and CFO, 58, 2001 base salary $335,000; William F. Martin, Jr., SVP Legal and Corporate Sec., 2001 base salary $267,750; Gregory A. Reid, SVP and Chief Mktg. Officer, 2001 base salary $226,375

Employees: 32,000

Principal Subsidiary Companies: Yellow Corp. is the parent company of Yellow Transportation. Other Yellow Corp. subsidiaries include Yellow Global, an international shipping logistics operation, and regional carriers Saia Motor Freight Line, Inc. and Jevic Transportation, Inc.

Chief Competitors: Yellow Corp. competes with traditional trucking companies, as well as with railroads and air freight companies. Major rivals include Roadway Express Inc., Arkansas Best Corp., and Consolidated Freightways Corp.

Increased competition among LTL trucking companies prompted Yellow Corp. to continue looking for ways to improve customer service; as a result, the firm began to expand beyond traditional LTL services into areas like logistics. With an eye toward additional international growth, Yellow Corp. created YCS International in 1998. Regional LTL services were bolstered by the purchases of Action Express in 1998 and Jevic Transportation in 1999. Believing that Internet technology would allow for more streamlined operations among all industry players, Yellow Corp. created, an online hub for trucking and other transportation companies, in 2000. While the marketplace was originally created in conjunction with two venture capital firms, Yellow Corp. eventually became the sole owner.

Action Express and WestEx were consolidated into Saia Motor Freight Line in 2001. Yellow Freight changed its name to Yellow Transportation the following year to reflect its broader service offerings. Saia Motor Freight and Jevic, both non-unionized regional carriers, were placed into a new holding company, SCS Transportation, which Yellow Corp. planned to spin off as a public company in late 2002.


One of the first key shifts in Yellow Corp.'s corporate strategy came in 1992 when the firm bought Preston Trucking, a struggling regional and interregional LTL hauler. The purchase allowed Yellow Corp., which had specialized in long-haul LTL services for several decades, to move into regional and interregional LTL hauling for the first time. Management had made the decision to diversify after coming to the realization that customers were looking for freight haulers who could offer both regional and national hauling services. Along with paying $24 million for Preston, Yellow Corp. also assumed $116 million in debt. Although management was able to restore Preston to profitability within a year of the acquisition, the performance of the Preston unit remained unstable. As a result, Yellow divested a large portion of Preston in 1998. Although the purchase itself posed problems for Yellow Corp., the decision to diversify into new services served the company well in the late 1990s, as rivals continued to increase the comprehensiveness of their freight transportation services.

The corporate strategy devised by Maurice Myers, who took the helm of Yellow Corp. in 1996, remained in place in the early 2000s. Myers began expanding the firm's focus from LTL trucking to global transportation services by moving into things like logistics. This proved a successful strategy for the firm, particularly when cost-conscious companies began looking to logistics firms to help manage inventory. According to a January 2001 article in Business Week, "Indeed, Corporate America's rush to minimize inventories is keeping the nation's freight companies rolling faster than ever, effectively turning their fleets into warehouses on the go. Traditional trucking companies such as Yellow and Roadway Express Inc. are pushing into realms once controlled by overnight shipping companies."

William Zollars, who succeeded Myers in 1999, continued to look for new growth areas for Yellow Corp. In mid-2000, Yellow Corp. launched Operation Slingshot, a strategic plan designed to put the firm's use of Internet technology on par with the likes of United Parcel Service (UPS) Corp. and FedEx Corp. Key to the new initiative was the rapid expansion of Yellow's Web site, dubbed MyYellow, which launched in early 2000 to allow customers to track their shipments online. Yellow added a rate calculator to its site to help clients to determine prices based on variables such as delivery times. In addition, Yellow developed technology to allow clients to do things like file damage claims and make payments online. Within a year, the number of customers using MyYellow increased from 4,300 to roughly 37,000 people.

CHRONOLOGY: Key Dates for Yellow Corp.


Yellow Transit trucking company is founded in Oklahoma City, Oklahoma


The purchase of Watson-Wilson Transportation System doubles Yellow's size


Yellow Transit changes its name to Yellow Freight System, Inc.


The firm lays off 20 percent of its workforce


Yellow purchases Preston Trucking Company


Yellow Freight restructures as a holding company named Yellow Corp.


ellow Corp. creates YCS International and acquires Action Express


Jevic Transportation is purchased


Two venture capitalists and Yellow Corp. jointly create


Action Express and WestEx are consolidated into Saia Motor Freight Line


Yellow Freight changes its name to Yellow Transportation. Saia Motor Freight and Jevic are placed into a new holding company, SCS Transportation, which Yellow Corp. plans to spin off as a public company


The trend of intermodalism, whereby trucking services work in conjunction with trains, boats, and airplanes to perform long-haul deliveries, became increasingly important to firms like Yellow Corp. in the late 1990s. Using other modes of transportation to complete deliveries (typically via alliances with other shipping companies) have allowed the firm to diversify to the extent it has. For example, Exact Express time-specific delivery services make use of both air and ground transportation modes. In addition, Yellow Global uses both air and sea freight forwarding services to deliver products to their final destination.

Yellow Corp. continues to focus on using technology to streamline its productivity and to offer innovative services to its clients. In 2001, Yellow Corp. transformed from an online transportation marketplace to a marketer of the transportation management software developed internally by Yellow Corp. also began offering logistics and transportation management consulting services. In 2002, Yellow Corp. created transportation technology management unit Meridian IQ.


Yellow Freight offers national, regional, and international freight transport. Goods hauled typically include industrial, commercial, and retail products. Along with traditional services like Standard Ground, Yellow Freight also offers premium services like Exact Express, a delivery service that allows clients to specify their desired delivery time on any given date. Definite Delivery is a guaranteed on-time shipping service that allows clients to track shipments from the moment they are picked up until they are delivered. Saia Motor Freight offers regional LTL delivery services, including both overnight and next-day delivery services to 21 U.S. states, as well as to Canada, Mexico, and Puerto Rico. Jevic Transportation offers regional and interregional freight transport services within the United States.


Thanks to its use of just-in-time technology, Yellow Corp. was able to coordinate the delivery of 150,000 copies of the new Harry Potter release, Harry Potter and the Goblet of Fire, to book stores across the United States shortly before midnight on July 8, 2001. The publisher, Scholastic, had developed a marketing campaign that centered around the book's specific release time and date; as a result, deliveries too early or too late could have undermined the entire campaign. Yellow Corp.'s Exact Express service proved equal to the task, which pleased not only Scholastic executives, but also the thousands of children waiting in line to buy the book.


Yellow Corp. continued to expand internationally into the early 2000s. The firm changed the name of its international arm from YCS International to Yellow Global, believing the new name would capitalize on the strong image of the Yellow brand. In an effort to boost international sales, which were less than 1 percent of total sales in 1999, Yellow Corp. also planned to more closely align the sales and marketing efforts of Yellow Global with Yellow Corp. In 2001, the firm began offering its Exact Express service in Mexico. The following year, Yellow Corp. and Road Air Distribution B.V., based in the Netherlands, agreed to work together to handle one another's shipments in their home countries.



anderson, james a. "clipped wings and broken wheels." business week, 18 april 2001. available from

arndt, michael. "industry outlook 2001-transportation." business week, 2 january 2001. available from

haddad, charles. "transportation: a long haul to recovery?" business week, 14 january 2002. available from

kirkwood, heather. "yellow buys local trucker to fortify long-term plans." the kansas city business journal, 24 september 1999.

wilson, tim. "portal, exchange deliver goods for freight carrier." internetweek, 11 june 2001.

"yellow corp." international directory of company histories. detroit: gale research, 1996.

yellow corp. home page, 2002. available at

For an annual report:

on the internet at:

For additional industry research:

investigate companies by their standard industrial classification codes, also knows as sics. yellow corp.'s primary sics are:

4213 trucking, except local

4731 arrangement transport freight & cargo

6719 holding companies, not elsewhere classified

also investigate companies by their north american industry classification system codes, also known as naics codes. yellow corp.'s primary naics codes are:

484121 general freight trucking, long-distance, truckload

488510 freight transportation arrangement

551112 offices of other holding companies