Yellow Freight to Raise Rates 4.9%

Less-than-truckload carrier Yellow Freight System plans to raise rates 4.9% beginning Aug. 1, the Wall Street Journal reported.

The increase, which is timed for the peak season from August to November, applies to its general tariff rates. Shippers paying these rates represents about half of its business. It also provides an important benchmark when the company negotiates individual contracts with customers.

While some of Yellow’s customers questioned the move while the economy still struggles, the subsidiary of Overland Park, Kan.-based Yellow Corp. said it believes that retailers and manufacturers will pay more in order to keep inventories to a minimum.

William Zollars, Yellow’s chairman and chief executive officer, said that freight volumes are running more than 10% below last year’s levels, but he is confident the rate hike is the right move.

Other less-than-truckload carriers, such as Roadway Express and Consolidated Freightways, told the Journal they are considering rate increases. Historically, August has been a popular month for enacting LTL rate increases in order to capture higher rates for the industry’s peak season.

Last month, Yellow Freight said that it has increased its standard ground regional network, now completing 70% of shipping in three days or less.

In April, Yellow Corp. said that its first-quarter earnings fell 49%, and it had eliminated 2,900 jobs or 9% of its workforce during the quarter.

Yellow Corp. is ranked number No. 4 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data.

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