Yellow Transportation Inc.: The Tech Leader of the Trucking Industry in the US

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Case Details:

Case Code : OPER032
Case Length : 11 Pages
Period : 1991 - 2003
Organization : Yellow Corp.
Pub Date : 2004
Teaching Note : Available
Countries : USA
Industry : Logistics

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Yellow's history can be traced back to 1924, when A.J. Harrell (Harrell), an Oklahoma-based entrepreneur, started Yellow Cab Transit Co., a bus and taxi service, serving Oklahoma City. Soon, the service extended to other cities as well, and by 1926, the company had added interstate shipping services to its business. Harrell acquired a couple of trucks to handle the freight that they had been hauling on their buses till then. Finding the shipping business more lucrative, the company gradually started moving away from the cab service. The name of the company was also shortened to Yellow Transit Co. Harrell realized that safety was a critical issue in the transportation industry and focused on road safety and accident prevention.

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To make the shipping trucks safer, he commissioned E.I. DuPont Co.7 to suggest a color with which to paint them, so that they would be visible from the greatest possible distance on national highways. After considerable research, DuPont suggested a color called Swamp Holly Orange8. The company adopted this as its official color and consequently, all its trucks were painted a bright orange.

In 1944, Harrell sold his shipping operations to a New York-based investment group headed by financier, Arlington W. Porter. The company's name was changed to Yellow Transit Freight Lines Inc. However, the new management was not successful in running the service and performance began to fall. In 1952, George E. Powell, Sr., of Kansas City and an ownership group that included Powell's son, George E. Powell Jr., and Roy Fruehauf, owner of the Fruehauf Trailer Co.9, acquired the company. Within a year, the Powell family brought the company from near-bankruptcy to profitable growth. Subsequently, the headquarters of the company was also shifted to Kansas City.

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7]  E. I. DuPont de Nemours and Company (DuPont) is a global science and technology company engaged primarily in chemical, material and biological sciences. The company was based in Wilmington, US.

8] Named after the color of a berry that grows in the southern states of the US.

9] A truck manufacturing company based in Detroit, USA.


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