Less-than-truckload carrier Yellow Corp. (NASDAQ: YELL) announced Tuesday it will take delivery of 1,200 tractors as part of its ongoing restructuring initiatives.
The Overland Park, Kansas-based company facilitated the equipment purchase using the second tranche of a $700 million Treasury loan the company received in 2020. The highly scrutinized loan made to the carrier described as in “precarious financial condition” at the time was done so under a special carve-out afforded under the CARES Act for companies deemed “critical to national security.”
The $400 million tranche provides Yellow funds to replace its aging fleet. Yellow took delivery of more than 1,100 tractors, 1,600 trailers and 140 containers during the first quarter.
“I’m thrilled to provide this brand-new equipment to our drivers and buy it from a great American company. We are proud to refresh and modernize much of our fleet,” said CEO Darren Hawkins. “This is not only a boost for our employees but it’s a win for the economy and America’s frontline workers.”
In the past, Yellow’s management has said replacing older tractors can lower per-unit operating costs by roughly $10,000 annually when taking into consideration improved fuel inefficiency, decreased maintenance and downtime, and the improved economics of owning versus leasing.
“This is much needed and rolling off the Peterbilt assembly line at just the right time,” said Joe Sturtz, VP of equipment. “Pristine equipment will strengthen customer service and reduce downtime.”
The new Peterbilt (PACCAR, NASDAQ: PCAR) day cabs are in the process of being delivered to Yellow terminals throughout the country.
Yellow expects 2021 capital expenditures to amount to $450 million as it transforms into a super-regional carrier, combining its separately run regional carriers onto one platform.