U.S. company’s closure ends legacy of former local trucking firm

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This article was published 11/08/2023 (782 days ago), so information in it may no longer be current.

When Yellow Corp., one of the largest trucking firms in North America, declared bankruptcy recently it immediately threw about 30,000 people out of work.

In Winnipeg, where the company operated as YRC Freight, it also ended the legacy of the former Reimer Express Lines, once one of the largest players in Canada and bedrock of the Manitoba trucking industry.

Reimer was acquired by the U.S. trucking company, Roadway, in 1997 and Roadway was acquired by Yellow Corp. in 2003.

Union and industry officials could not say how many local drivers would have been affected other than that the Unifor union local had about 200 members. But Chris Santos, Unifor’s national representative suggested that number accounted for the union’s membership at the company across the country.

Yellow’s demise was attributed to mismanagement over the years including over-sized debt after a string of acquisitions.

Aaron Dolyniuk, the executive director of the Manitoba Trucking Association, said it’s hard to isolate the company’s assets deployed or activities in Canada from its U.S operations as trucks and trailers were integrated across the border.

But he believes that while the Reimer Express of old was one of the best in the less-than-truckload business, American ownership diluted its presence in that market to only the most profitable of runs.

“Reimer went from one of the largest players in the country to just a mere shadow of what it once was when it was purchased by the U.S. company,” he said. “I don’t think the American company understood the Canadian context.”

The assets of the company still has significant value and it is attracting multiple offers for additional debt prior to a bankruptcy sale of the assets. But it is no longer moving freight.

Jason Dubois, the president of Len Dubois Trucking Inc. and the chairman of the Manitoba Trucking Association said, “It’s sad that those people are out of work and have to look for other jobs.”

But having said that, the Manitoba trucking industry is perpetually short of qualified drivers and that continues to be the case today.

“I don’t suspect most of these people will have difficulty finding new work,” Dubois said. “The industry is always looking for qualified drivers.”

But at the same time, the industry is experiencing a softening of demand after the tumultuous pandemic and post-pandemic period when the shipping industry required all hands on deck.

As well, Dolyniuk said freight rates, in an industry that typically manoeuvres around razor thin margins, are currently lower than usual.

“I don’t know if there will be large impact on the freight because we have seen a slowdown in the industry,” said Dolyniuk. “If you were to pick up a load on the spot market these days there would be a good chance that you would have to move it at a loss with the going rates.”

During and immediately after the pandemic analysts believe there was some over-purchasing going on out of fear of being shut out of much needed manufacturing inputs or consumer goods because of supply chain uncertainties caused by the pandemic.

Now that systems have calmed down, the panic orders have subsided.

Not to say there will be no impact from YRC’s exit from the market, but Dubois and others said there was a good amount of capacity in the market.

As for the laid off workers, Santos said the company has made representations that it intends to honour severance agreements as well as assist workers in finding new work.

“They are working diligently to make sure their Canadian branches will be compensated properly,” Santos said. “But the difficulty is finding out how and when, because it appears there are minimal management resources left.”

He said labour relations, payroll personnel and human resource staff have been dramatically cut back in Canada.

martin.cash@freepress.mb.ca