YRC Worldwide CFO Bruffett leaves for Con-way

YRC Worldwide Inc. has lost a top executive to a competitor.

About three weeks after fielding questions about YRC in an earnings call, CFO Stephen Bruffett has resigned to take the same position with Con-way Inc. He had held the position since late 2007 and had worked at YRC about 10 years.

Paul Liljegren, YRC’s chief accounting officer, has stepped into Bruffet’s former position on an interim basis, YRC said in a Thursday release after the market closed. Liljegren will continue in his current role, which also includes vice president and corporate controller titles.

“As the executive responsible for overseeing our accounting practices and his previous experience in treasury, audit and other financial functions, Paul is well-versed in all of the aspects of our business, and we fully expect that he will easily and seamlessly fill in as our interim CFO,” YRC Chairman and CEO Bill Zollars said in the release. “We have already begun to identify and evaluate internal and external search candidates to replace Steve.”

Liljegren has been at YRC since 2004 and took his current role in 2005.

In a Thursday release, Con-way CEO Douglas Stotlar called Bruffett a “seasoned transportation executive.”

“He is highly respected in the financial community and holds a well-earned reputation as a skilled manager with broad knowledge and expertise in our industry,” he said.

Con-way, based in San Mateo, Calif., is a freight transportation and logistics services company with 2007 revenue of $4.4 billion.

DHL-UPS deal shakes up the small parcel market

The decision by Deutsche Post to restructure its DHL U.S. Express business by "outsourcing" its air freight shipments to rival UPS and cutting back its ground network (Purchasing, July 2008, p. 28) has some logistics buyers and market watchers re-evaluating the small parcel market's competitive landscape. Shippers are trying to determine if the moves will make DHL a more competitive player in the market or if the restructuring is a sign that competition in the parcel market is on the decline, giving logistics buyers less leverage.

The restructuring didn't surprise many in the logistics field. But while most logistic industry watchers were expecting Plantation, Fla.-based DHL Express to make a major move given its performance in the U.S. (and DHL's parent had given indications that it would make a move this year) the air freight deal with Atlanta-based UPS did catch many off-guard.

"It's really different than what a lot of people thought they might do," says analyst David Ross of Stifel Nicolaus in Baltimore. "There was more talk of a deal with FedEx before this deal came out."

In the short period since the deal was announced in late May, customer reaction has been mixed. On the one hand, some DHL customers perceive the move as their getting "UPS service at DHL rates" in the words of Mark Kolde, vice president of InSource Logistics in Hillard, Ohio. On the other hand, some shippers and analysts see the move as a sign that DHL is no longer going to compete for market share and that it simply wants to hold a presence in the U.S. And less competition could mean higher rates, if UPS and FedEx don't feel quite as threatened by the aggressive stance DHL took in the period following its Airborne acquisition.

"There has been some freight diversion since this deal was announced," Ross tells Purchasing. "And customers may continue to shift away from DHL. We expect there to be more market share loss than DHL is anticipating."

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Reckless Disregard

By James P. Hoffa, Teamsters General President

Even as he heads toward the exit, George Bush is sabotaging the safety of American working families. His transportation secretary, Mary Peters, announced Monday that the border will be kept open to dangerous Mexican trucks for two more years.

I’m mad as hell about it, but I’m not surprised. Michigan residents shouldn’t be either.

Bush’s decision to keep the border open fits with his pattern of reckless disregard for the safety of the American people.

It was about a year ago that he first allowed trucks from Mexico to travel freely on U.S. highways. He called it a “one-year pilot program.” In reality, it’s the first step toward unfettered access for trucks from anywhere south of the border.

Most Americans think this is a terrible idea. That’s why the Bush administration first tried to sneak the pilot program into existence last year. It was only after the Teamsters outed the administration that officials admitted they really were opening the border to dangerous trucks from Mexico.

The program’s unpopularity is also why the Bush administration announced a few days ago that the border would stay open for two more years. Announcing bad news in August, when most people aren’t paying much attention, is an age-old trick in Washington.

Members of Congress did hear the news as they wrapped up their work before the August recess. Some were furious that Bush had once again defied them.

Congress had already passed one law closing the border to these trucks, which don’t meet the same safety standards as U.S. trucks.

But the Bush administration simply ignores the law. That’s why Congress is in the process of passing more legislation to stop the lawbreaking.

Rep. Peter DeFazio, D-Ore., chairman of the House Highways subcommittee, issued a blistering statement after he found out the Bush administration planned to keep the border open.

“This administration has been hell-bent on opening up our border but over the past year has failed to show they can adequately inspect Mexican carriers while also maintaining a robust U.S. safety inspection program,” DeFazio said. “There is no reason to believe these problems will be addressed over the next two years. The safety of the traveling public must come first – before the administration's fantasies about free trade.”

Republican Sen. John McCain didn’t voice any outrage. He strongly supports opening the border to unsafe Mexican trucks. Sen. Barack Obama, the presumptive Democratic nominee, pledged to the Teamsters that he will close the border if he’s elected.

House Transportation Committee Chairman Jim Oberstar, D-Minn., said the Bush administration is flouting the law. Sen. Byron Dorgan, D-N.D., said the Bush administration showed “reckless arrogance for the law.”

Well said.

We have laws here in the United States that require certain safety standards to be met before the border can be opened.

Border inspectors must be able to make sure Mexican drivers speak English.

Inspectors must also be able to check every Mexican truck every time it crosses the border.

Mexican drivers must be tested for drugs and alcohol according to U.S. standards.

Mexican trucks must be as safe as U.S. trucks.

The agency that opened the border, the Federal Motor Carrier Safety Administration (FMCSA), claimed that all those conditions were met. That isn’t true.

The Teamsters have taken our case to court, asking that the border be closed. We are still awaiting the judges’ opinion.

Unfortunately, it will take more than judicial intervention to force FMCSA to do its job.

Since Bush became president 7-1/2 long years ago, FMCSA has changed the rules so that employers can require truck drivers to spend more hours behind the wheel.

The agency does a lousy job enforcing existing safety regulations.

It won’t report to Congress on the most dangerous motor carriers, as it is required to do.

It refuses to enforce the Americans With Disabilities Act, despite a court order.

Keeping America safe means more than making sure terrorists don’t attack. It means making sure our families here in Michigan and throughout the rest of the country don’t have to dodge 90,000-pound unguided missiles from Mexico on our highways.

House Committee To Hold Hearings on UPS-DHL Deal

The chairman of the House Judiciary Committee announced Friday that he plans to hold hearings in September to review an agreement between United Parcel Service Inc. and DHL Express that makes UPS the exclusive provider of air shipping for DHL's North American package delivery service.

The hearing also will focus generally on competition in the air shipping industry.

UPS and DHL announced their deal, a 10-year agreement, in May.

"A number of concerns have been raised regarding consolidation in the air freight business in general and the proposed consolidation involving DHL in particular, including the impact on jobs in the affected communities," Rep. John Conyers, D-Mich., the committee's chairman, said in announcing the hearing.

Conyers' announcement comes the same week that two senators called on federal antitrust regulators to take a close look at the deal.

On Monday, Sens. Herb Kohl, D-Wis., and Orrin Hatch, R-Utah, made their request in a letter to officials at the Juctice Department and the Federal Trade Commission.

The senators said the deal raised questions about DHL's ability to compete against UPS, and they said the agreement would have a "devastating financial impact" on DHL's current air transport providers, ABX Air and ASTAR.

UPS and DHL are the second- and third-largest overnight delivery services in the U.S., behind Fedex Corp.