Saturday, May 5, 2012

YRC Concentrates On Home LTL Road Haulage Freight Market

Q1 Figures in as Welch Continues to Dodge Bullets
Shipping News Feature

US – At a time when virtually everyone in the trucking industry is looking nervously about it seems bad news becomes good news when things aren’t as black as previously. Such is the situation at YRC Worldwide which reported another loss for Q1 but an improvement against the first quarter of 2011. The figures came at a time when good news stories in the freight sector, particularly road haulage, are not exactly thick on the ground.

New boss James Welch, who has a history with YRC having worked there until 2007 prior to his return last year, must feel like the reverse of a prodigal son, and he has acted immediately to try and restore profitability to the ailing logistics giant. Sheer size seems to have acted as a buffer against the economic winds which have buffeted YRC and the phrase ‘too big to fail’ springs to mind.

Welch makes no secret of the fact that he has had to prune sectors from the company and there have been sales of assets in the past four months both at home and abroad which obviously impact the balance sheet. The recently rebranded group is drawing in its horns to revert back to the status of North American less then truckload (LTL) carrier making the ‘Worldwide’ a little less valid and has improved tonnages with lower rates than some rivals whilst constantly managing to settle better terms with creditors and negotiating revitalised pay and conditions deals with unions, notably the Teamsters, agreements which rivals say give the company an unfair trading advantage.

YRC’s first quarter consolidated operating revenue reached almost $ 1.2 billion, a 6.4% jump against 2011 and the $8.4 million lost on the assets disposed of in the period, presumably Glen Moore and Shanghai Jiayu Logistics in China, took the overall consolidated operating Q1 loss to $48.8 million. That’s a comprehensive loss this quarter of $79.8 million, down around $18.75 million on last year. CEO James Welch commented:

"We are experiencing increased efficiencies at each of our operating companies. Our employees are responding extremely well to our operating changes to regain a leading position in the LTL industry, and earlier this week, our senior credit facility lenders gave us a unanimous vote of confidence by amending those facilities to increase our liquidity by allowing us to retain the proceeds from the disposition of some excess real estate and increasing our financial flexibility for the foreseeable future. This is an exciting time at YRCW as our team now has the financial flexibility and the tools to take this business to the next level.

“Our plan is to continue building on this positive momentum throughout 2012 with the determination of delivering consistent, high-quality service that is both reliable and cost effective. The feedback we're getting is that our operating companies are providing the service levels our customers expect, and they are rewarding us with increased levels of business as our first quarter results indicate.

“Year-over-year core operating improvements show promise and indicate we are on the right path. However, we are still working to address some outstanding issues related to previous decisions that have affected the pace of our recovery.”