America’s logistics boom has turned to bust
ON AUGUST 6TH Yellow, one of America’s biggest trucking firms, declared bankruptcy and announced it would wind down operations after 99 years in business. It collapsed under the weight of falling sales and a mountain of debt. That is a heavy blow for its owners and 30,000 staff. It is also emblematic of a sharp reversal taking place in the American logistics industry.
Beginning in 2020 lavish stimulus cheques, combined with a lockdown-induced squeeze on services spending, led American consumers to splurge on goods. Appliances, cars and furniture clogged up ports, warehouses and truck depots. Online deliveries surged as shoppers shunned stores, adding to demand. As consumers groaned over lengthy delays, revenues in the logistics industry soared, increasing by roughly a third between the start of 2020 and mid-2022, according to America’s Census Bureau. Firms in the industry hired 1m workers and built 1.8bn square feet (nearly three Manhattans) of new storage space on hopes that the frothiness would continue.
Troubles with unions are adding to the industry’s headache. Earlier this year dockworkers at several west-coast ports went on strikes linked to pay negotiations. UPS and FedEx, America’s two largest parcel-delivery businesses, have also faced unrest. Yellow’s management blames its collapse on the Teamsters union, which blocked a restructuring plan.
2023-08-10 07:34:35
Post from www.economist.com