YRC touts benefits of merger

The merger of the national trucking carriers operated by YRC Worldwide Inc. has gone smoothly so far with no impact on customers, the company’s top officer told analysts Tuesday.

Bill Zollars, YRC chairman and chief executive, said consolidating the terminals of Yellow Transportation and Roadway is proceeding and will be accelerated through 2009. About 60 terminals have been merged or are in the process of being completed, he said at an analyst conference in Chicago held by Robert W. Baird & Co. Inc.

And with a weakening economy prompting YRC to write down nearly $900 million in goodwill during the first nine months, Zollars said the consolidation will benefit the company.

Zollars said the company has conservatively estimated that $200 million in annual cost savings could result once the Yellow-Roadway merger is finished.

“We have an opportunity to improve our performance even with the economy we have today,” he said.

Some industry analysts have questioned YRC’s timing of the Yellow-Roadway merger, the biggest of its kind ever attempted in the U.S. trucking industry. If it does not go according to plan, customers could flee at a time when YRC can ill afford to lose business.

However, Zollars responded that unlike most other previous merger scenarios in the trucking and rail industries, the groundwork for this particular consolidation has been laid since 2003, when Yellow Corp. acquired Roadway Corp. Full Story........