Yellow Agrees to Terminate California Terminal Leases

Liquidation of the real estate assets of bankrupt less-than-truckload carrier Yellow Corp. entered a new phase in recent days — termination of terminal lease agreements.

The carrier’s former landlords at two facilities inked terminal lease termination agreements with Yellow’s administrators, according to court documents filed March 18.

Deals were agreed with NATMI LPF Bloomington and M4 Terminals to end the leases of facilities in Bloomington, Calif., and Santa Clara, Calif., respectively, the documents show.

The 325-door, 54.2-acre Bloomington site was the largest of the leased terminals still available in December when Yellow’s administrators and bankruptcy adviser Ducera began a third auction of facilities.

Yellow’s estate will receive $55 million from NATMI LPF in return for handing back the site in the Inland Empire — the major Southern California warehousing hub close to the port of Long Beach and Los Angeles airport — to its owner.

In advance of this latest phase of the liquidation, terminals and leases once held by the one-time third-largest player in the LTL space followed two paths after the auction kicked off: private sales and auction sales.

A number of the largest LTL carriers jumped the queue over the past three months or so, inking private sales with the administrators, the latest of which was ABF Freight, the LTL unit of ArcBest.

ABF paid a total of $11.5 million for two former Yellow terminals in South Kent, Wash., and Aurora, Colo. The former site has 60 doors and the latter 108 doors, with their respective sticker prices of $4.5 million and $7 million reflecting the relative size.

ArcBest ranks No. 12 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 7 in the LTL arena.

One earlier set of private deals saw Knight-Swift Transportation Holdings, A. Duie Pyle and TFI International buy terminals to bolster their respective LTL operations.

Knight-Swift paid $9.9 million for the Downey, Santa Maria and San Diego, Calif., and Roanoke, Va., facilities; Pyle paid $4.5 million for terminals in Bowling Green, Ohio, and Charleston, W.Va.; and TFI paid $700,000 for a terminal in Fayetteville, N.C.

Knight-Swift ranks No. 7 on the for-hire TT100 and is top of the TT truckload carrier rankings, but has been growing out its LTL business since buying AAA Cooper for $1.35 billion in 2021.

Pyle ranks No. 16 and TFI is No. 8 on the TT top LTL carrier list.

And in early December, Estes and Ramar Land Corp. kicked off the stand-alone deal push by purchasing 12 terminals for a combined $192.5 million.

Richmond, Va.-based Estes ranks No. 4 on the TT LTL list and No. 11 on the for-hire TT100.

Ramar’s parent company, R+L Carriers, ranks No. 17 on the for-hire TT100 and No. 5 on the LTL list, up from No. 8 a year earlier.

Ramar also agreed to purchase an ex-Yellow terminal in Jackson, Miss., in late January for $12 million, according to a separate court filing.

Size matters in the top-heavy LTL space as terminals are required for a successful business.

However, terminals require a great amount of land and cost a lot of money to build, and the land is typically hard to come by near major metropolitan areas, so Yellow’s vast network is in the process of being picked apart, largely by Top 10 players in the space.

The first opportunity to buy the pick of Yellow’s real estate assets came at the end of 2023 and raised $1.88 billion, justifying the administrators’ decision not to sell all the terminals to just one player.

A second auction raised $82.89 million.

When the latest auction began in December, a total of 47 owned terminals and 65 leased properties with more than 3,100 and 4,000 doors, respectively, were on offer.

Prior to the first auction, the administrators controlled 169 owned terminals and 149 leased properties.

Meantime, March court filings show Yellow’s creditors are advancing plans to dole out the remaining proceeds of the asset sales.