Unprecedented Auction: Used Trucks and Trailers from Bankrupt Yellow Corp. Flood the Market

Latest News / By Manifest Global Logistics

Published August 31, 2023

The used truck market is bracing for an extraordinary event as bankrupt Yellow Corp. prepares to auction off a substantial number of its trucks and trailers. Industry observers are closely watching this development, noting that while the auction is of unprecedented scale, the market is well-positioned to absorb the influx.

Stacy Tracy, President of auctioneers Taylor & Martin Inc., described the impending liquidation as a historical event that hasn’t been witnessed in decades. Tracy emphasized that this auction is the largest in terms of value in the entire history of the trucking industry. Despite the magnitude, experts believe that the market can handle the influx due to several factors.

Steve Tam, Vice President of ACT Research, leading the used truck practice, praised the methodical approach taken by the administrators of Yellow Corp.’s liquidation. Tam noted that the measured strategy, rather than flooding the market, helps maximize proceeds and prevent overwhelming the industry.

The timing of this auction is notable in the context of recent trends in the freight industry. Equipment shortages have plagued the industry, and the addition of Yellow’s trucks and trailers is unlikely to completely fill the gap. Ken Adamo, Chief of Analytics at DAT Analytics, pointed out that while the auction might add capacity, it won’t singlehandedly resolve equipment shortages.

Yellow Corp. occupied the 13th spot on the Transport Topics Top 100 list of the largest for-hire carriers in North America. The company possessed approximately 12,700 tractors and 42,000 trailers as of the second quarter of 2023. Notably, Yellow had made significant investments in updating its fleet before the liquidation.

The injection of newer model vehicles into the market is seen as a positive aspect of the sale. However, experts also acknowledged the presence of a substantial number of older trucks in Yellow’s fleet. ACT Research’s Tam described this dual composition as a “barbell” effect, with both newer and older models represented.

The sale is expected to comprise mostly day cabs, which bodes well for the auction’s success. Demand for day cabs remains strong, with agriculture and various other trucking segments showing interest. Day cabs are favored over sleeper cabs in certain sectors, adding to the appeal of Yellow’s assets.

Experts emphasized that the method of liquidation will influence pricing dynamics. A broader dispersal of the assets across various sectors is seen as a more effective strategy, rather than concentrating sales among a select few. This approach is expected to prevent undue downward pressure on prices due to oversupply in specific segments.

While the influx of vehicles might have a short-term impact on prices, the trucking market’s resilience is expected to prevail. The industry’s ability to adapt to varying conditions, coupled with strategic liquidation efforts, will likely mitigate any adverse effects of this historic auction.