In an announcement that can be viewed as a response to difficult market conditions in the trucking market, less-than-truckload transportation services provider YRC Worldwide announced today it plans to hasten the integration strategy of its two largest subsidiaries—Yellow Transportation and Roadway.
Yellow Corporation acquired Roadway for $1.1 billion in 2003. YRCW officials said that since that time the company has “reduced duplicate back-office functions, shared technology applications, formed common management teams, and combined corporate sales operations.
With today’s news, YRCW explained it is bringing together its local sales teams and will provide shippers with a comprehensive portfolio of services through one operating network entitled Yellow Roadway, with the Yellow Transportation and Roadway brands maintaining their own brands and presence in the LTL sector, represented by a joint sales team of more than 1,000 account executives. And by operating one national network, YRCW said it expects to increase its network density with the result being lower-fixed costs and service improvements. It added that it expects the integration effort to last through 2008 and result in more than $200 million in annual operating savings.
"Given the positive customer response from our recent combination of the corporate sales teams and the increasingly dynamic operating environment, we believe now is the right time to take such significant action," said Bill Zollars, Chairman, President and CEO, in a statement. "The economic downturn has created the capacity in our networks needed to effectively integrate our operations, while improving service reliability and speed. By offering a comprehensive service portfolio through one unified network, we can more effectively serve our customers and simplify their experience."
Other reasons cited for the change, according to YRCW, are positive customer response from combined corporate sales and the competitive opportunity to leverage scale for a broader array of services. And some of the benefits it highlighted included: a comprehensive service portfolio across all brands, simplified customer experience, further growth opportunities, and increased network scale and efficiencies.
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