NEW YORK (AP) — Trucking company Yellow Corp. has shut down operations and is headed for a bankruptcy filing, according to the Teamsters Union and multiple media reports.

After years of financial struggles, reports of Yellow preparing for bankruptcy emerged last week — as the Nashville, Tennessee-based trucker saw customers leave in large numbers. Yellow shut down operations on Sunday, according to the Wall Street Journal, following the layoffs of hundreds of nonunion employees on Friday.

In an announcement early Monday, the Teamsters said that the union received legal notice confirming Yellow was ceasing operations and filing for bankruptcy.

“Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” Teamsters general president Sean O’Brien said in a statement. “This is a sad day for workers and the American freight industry.”

The Associated Press reached out to Yellow for comment on Monday. No bankruptcy filings had gone live as of the early morning.

The bankruptcy reports have renewed attention around Yellow’s ongoing negotiations with unionized workers, a $700 million pandemic-era loan from the government and other bills the trucker has racked up over time. Yellow, formerly known as YRC Worldwide Inc., is one of the nation’s largest less-than-truckload carriers. The company’s reported closure puts 30,000 jobs at risk.

Here’s what you need to know.

WHAT WOULD BANKRUPTCY MEAN FOR YELLOW?

According to Satish Jindel, president of transportation and logistics firm SJ Consulting, Yellow handled an average of 49,000 shipments per day in 2022. Last week, he estimated that number was down to between 10,000 and 15,000 daily shipments.

With customers leaving — as well reports of Yellow stopping freight pickups last week — bankruptcy would “be the end of Yellow,” Jindel told The Associated Press, noting increased risk for liquidation.

“The likelihood of them surviving and remaining solvent diminishes really by the day,” added Bruce Chan, a research director at investment banking firm Stifel.

Yellow declined to comment when contacted by The Associated Press on Friday. In a Wednesday statement to The Journal, the company said it was continuing “to prepare for a range of contingencies.” On Thursday, Yellow said it was in talks with multiple parties about selling its third-party logistics organization.

Even if Yellow was able to sell its logistics firm, it would “not generate a sufficient amount of cash to keep them operational on any sort of permanent basis,” Chan said. “Without a major equity injection, it would be very difficult for them to survive.”

HOW MUCH DEBT DOES YELLOW HAVE?

As of late March, Yellow had an outstanding debt of about $1.5 billion. Of that, $729.2 million was owed to the federal government.

In 2020, under the Trump administration, the Treasury Department granted the company a $700 million pandemic-era loan on national security grounds. Last month, a congressional probe concluded that the Treasury and Defense Departments “made missteps” in this decision — and noted that Yellow’s “precarious financial position at the time of the loan, and continued struggles, expose taxpayers to a significant risk of loss.”

The government loan is due in September 2024. As of March, Yellow had made $54.8 million in interest payments and repaid just $230 million of the principal owed, according to government documents.

Yellow’s current finances and prospect of bankruptcy “is probably two decades in the making,” Chan said, pointing to poor management and strategic decisions dating back to the early 2000s. “At this point, after each party has bailed them out so many times, there is a limited appetite to do that anymore.”

In May, Yellow reported a loss of $54.6 million, a decline of $1.06 per share, for its first quarter of 2023. Operating revenue was about $1.16 billion in the period.

A Wednesday investors note from financial service firm Stephens estimated that Yellow could be burning between $9 million and $10 million each day. Using a liquidity disclosure from earlier this month, Yellow had roughly $100 million in cash at the end of June, the note added — estimating that the company has been burning through increasing amounts of money through July.

“It is reasonable to believe that the Company could breach its $35 mil. liquidity requirement at any moment,” Stephens analyst Jack Atkins and associate Grant Smith wrote.

DID THE COMPANY JUST AVERT A STRIKE?

Last week’s reports of bankruptcy preparations arrived just days after a strike from the Teamsters, which represents Yellow’s 22,000 unionized workers, was averted.

A series of heated exchanges have built up between the Teamsters and Yellow, who sued the union in June after alleging it was “unjustifiably blocking” restructuring plans needed for the company’s survival. The Teamsters called the litigation “baseless” — with O’Brien pointing to Yellow’s “decades of gross mismanagement,” which included exhausting the $700 million federal loan.

On July 23, a pension fund agreed to extend health benefits for workers at two Yellow Corp. operating companies, averting a strike — and giving Yellow “30 days to pay its bills,” notably $50 million that Yellow failed to pay the Central States Health and Welfare Fund on July 15, the union said. While the strike didn’t occur, talks of a walkout may have caused some Yellow customers to pull back, Chan said.

“The financial struggles of Yellow are not related to the union and the contracts,” Jindel said, pointing to management’s responsibility around its services and prices. He added the union wages from Yellow are “lower than any competitor.”

WHAT WOULD HAPPEN IF YELLOW WENT UNDER?

As Yellow customers take their shipments to other carriers, like FedEx or ABF Freight, prices will go up.

Yellow’s prices have historically been the cheapest compared to other carriers, Jindel said. “That’s why they obviously were not making money,” he added. “And while there is capacity with the other LTL carriers to handle the diversions from Yellow, it will come at a high price for (current shippers and customers) of Yellow.”

Chan adds that we’re in an interesting time for the LTL marketplace — noting that, if Yellow liquidates, “the freight would find a home” with other carriers, which may not have been true in recent years.

“It may take time, but there’s room for it to be absorbed,” he said.