Tuesday, January 4, 2011

US Truck Freight Carrier Gets A Reprieve

YRC Dodges Another Bullet
Shipping News Feature

US – Despite the ongoing pressure and cries of ‘foul’ from logistics group ABF Freight Systems the International Brotherhood of Teamsters have announced this week that they intend to allow freight trucking group YRC Worldwide a conditional extension to the preferential agreement granted to the group after protracted negotiations going back to 2008.

The extension means that YRC and other stakeholders in the survival of the company such as creditors and the group pension funds will see the existing employment and pension payment reduction terms agreed with the union remain in place until the 15th March. The agreement was finally put in place at a late meeting of those involved on New Years Eve.

The agreement was put in place, and has been retained, to allow time for a major restructuring plan which was negotiated in September and ratified by the Teamsters on the 30th October last year. In it the YRC group undertook to attract equity investment and reduce debt by the end of 2010. Speaking on behalf of the union Teamsters National Freight Division Director Tyson Johnson said:

“Unfortunately with the economy and the freight industry still struggling and the company’s lenders hesitant to make any significant concessions given the financial and legal uncertainties created by ABF’s lawsuit, YRCW ran out of time in 2010 to complete any of the significant restructuring elements. We pushed the envelope to keep people working to find a solution but given what transpired since October 30 we thought it in our members’ best interests to grant some additional time.

“Our 25,000 members at YRCW should know that we extended the timelines only after getting strong commitments from YRCW management to redouble its efforts regarding debt reduction and raising new equity and agreement from the lenders to continue deferring payments during the extension period. Our number one goal remains to achieve a restructuring at YRCW that creates a viable entity that continues to provide good jobs and benefits and we will continue those efforts into 2011.”

It would be glib to say nobody wishes to see the axe fall on YRC but other industry competitors have been pointing out for a long time that oversupply, particularly in the less than truckload (LTL) market remains a serious problem despite the recent upturn in fortunes.