Yellow Roadway Corp. said Monday that it would close USF Dugan, one of its recently acquired regional carriers, beginning July 8.
The Wichita-based unit’s area of operations will be filled by other regional carriers operated by YRC Regional Transportation, which was formed when Overland Park-based Yellow Roadway completed its acquisition of USF Corp. for $1.37 billion last month.
Dugan was one of four regional carriers operated by Chicago-based USF, which was struggling before being bought by Yellow Roadway. One of USF’s operational problems had been that Dugan overlapped its service territory with other USF trucking firms, according to transportation analysts.
Dugan has about 2,300 employees, including about 1,900 drivers and dock workers, said Jim Staley, president of YRC Regional, which is based in Akron, Ohio. The company does not know how many employees will remain with the company. He said all Dugan employees have been encouraged to apply for jobs with the carrier moving into their area.
They are USF Holland, USF Bestway and USF Reddaway. Some of Dugan’s service areas are served by Holland and Bestway. The company hopes customers will transfer business to the other carriers.
“We’re hoping to retain a large part of that group, but it will depend on how successful we are in keeping our customer base,” he said.
Holland will move into Dugan’s service area in Missouri and northeastern Kansas. Dugan has a terminal in Kansas City, Kan., that will be acquired by Holland, according to USF’s Web site. Dugan has more than 150 employees there.
Holland will also acquire Dugan’s Missouri terminals in Joplin and Springfield. Other Missouri terminals operated by Dugan, such as in St. Louis and Columbia, will be shut down.
Most of Dugan’s other terminals throughout Kansas will be acquired by Bestway. The terminal in Topeka will close.
Staley said there was no final assessment yet on the cost of closing Dugan. However, the company noted that its previous 2005 earnings-per-share forecast of $5.35 to $5.50 includes the closing of Dugan.
The hourly employees of Holland, USF’s biggest operating unit, are represented by the Teamsters union. The Teamsters were trying to organize Dugan before the buyout by Yellow Roadway, and workers at a few terminals had voted in favor of the union.