“The fifth-largest trucking carrier in the country, Yellow is teetering on the edge of bankruptcy as a dispute between management and the International Brotherhood of Teamsters, the union representing the truck drivers, threatens to massively disrupt operations next week,” reports FreightWaves.

Coming up on a $1.2 billion loan due next year and a continued loss in revenue for the last few months, Yellow is trying to maintain its liquidity and avoid bankruptcy by withholding its employees’ health and pension benefits, according to The Wall Street Journal. “Nashville, Tenn.-based Yellow is the third-largest operator in the less-than-truckload (LTL) business, in which carriers haul cargo from multiple customers in the same trailer,” the Journal reports.

In response, the Teamsters union is threatening a strike, as soon as July 24, if payments are not received by the end of the week.

The board of trustees that manage benefits for the Teamsters stated that Yellow withheld payments due July 15 and indicated it would do the same for the August 15 payments. The two missed payments would total $50 million.

“We believe it would be extremely difficult for Yellow to recover from a full-blown strike given its precarious financial status,” TD Cowen analysts said in a note Tuesday.

The freight carrier is on the hook for a $700 million Covid-era loan as well as about $500 million from private lender Apollo Global Management. Yellow had to get a waiver recently which allowed its finances to fall below established levels with its lenders.

“A Yellow failure would mark the biggest shutdown of a U.S. trucking company since Consolidated Freightways, once the country’s largest long-haul trucker, abruptly ceased operations in 2002,”the Journal writes.

Analysts say other LTL carriers are picking up business from Yellow customers and that some truckers are delaying new contracts with a view to securing better pricing in the event that Yellow goes out of business. “We believe the entire industry stands to benefit if Yellow were to go under,” Jason Seidl, a TD Cowen analyst, said in a July 13 report.