Thursday, January 01, 2009

Arkansas Best Lives Up To Name

In a year when nine publicly traded Arkansas companies lost more than 40 percent of their value, Arkansas Best Corp. had the best return for investors.

The Fort Smith-based company, whose biggest subsidiary is trucking firm ABF Freight System Inc., finished 2008 up more than 37 percent. It closed at $30.42 Wednesday, up $1.08 for the day in trading on the Nasdaq exchange.

Arkansas Best's attraction for investors is its stable financial position, said David Humphrey, the company's director of investor relations.

"We have a pretty strong balance sheet and essentially no debt," Humphrey said. "At the end of the third quarter, we had $230 million in cash available. We have an experienced management team. And we're just a good, conservative Arkansas company."

Full Story.......

Wednesday, December 31, 2008

Shippers sailed rough seas in 2008 economic storm

They carry laptops and toys, cars and coal, but they're not Santa's elves, and they weren't very jolly this holiday season.

It's been a devastating year for the nation's railroads, trucking companies and package shippers - the companies on the "front lines" of the economic recession. Shipments have plunged as retailers pulled back on orders and consumers tied their purse strings tight in preparation for more hard times. Swiftly accelerating oil prices through the first seven months of the year crippled companies even more.

The Dow Jones Transportation Average, which incorporates railroads, shippers, airlines and logistics companies, lost a quarter of its value in 2008 and fell more drastically - by about a third - in the last three months of the year. That compares with a 40 percent decline for the Dow Jones Total Market index and a drop of 39 percent for the Standard & Poor's 500 index in 2008. Full Story......

Labor Pains Are Not Easily Shared

The Teamsters are not generally known for being easy to push around, so it is of some interest that the union's leaders have struck an agreement to allow the country's largest trucking company to cut the pay of its union members by 10 percent to help the firm survive the economic storm.

As you might expect, the deal does not come without a price: In return, union employees will get warrants that will allow them collectively to buy 15 percent of the stock of YRC Worldwide. The company has also assured the union that similar pay cuts will be given to nonunion employees, including top executives.

The hard-nosed calculation made by Teamster officials is that, with YRC's financial viability at stake, it is wiser and fairer to spread the pain among all active workers rather than force the company to lay off even more workers, or refuse to take a cut and possibly force the company into a bankruptcy reorganization in which workers and retirees would likely take even bigger hits. Full Story.....

Roadway Express to shut terminal in West Sencea that employs 198

The idling U. S. economy is putting the brakes on a local trucking facility

Roadway Express will close its West Seneca facility March 1 as part of a national consolidation effort by parent company YRC Worldwide to “integrate” 80 facilities into a total of 450 consolidated operations.

“These closures are a result of combining two operations and eliminating duplicate capacity and assets,” said spokeswoman Cecile Fradkin.

The company’s Yellow Transportation facility in Tonawanda will remain open. YRC Worldwide said some of the 198 union, hourly and clerical employees at Roadway Express may be taken on there, but declined to say how many or how they would be chosen. Nelligan said he expects very few workers will be given the opportunity to transfer.

The closure will come just three years after company restructuring led to expansion of Buffalo operations, which added 130 jobs at the West Seneca facility. But the slowdown of the U. S. economy has greatly decreased the volume of freight shipped by the company.

“We haul freight, so if the economy is in the toilet, we’re in the toilet,” said Ken Nelligan, secretary and treasurer of the Teamsters Local 449, which represents the workers. “Trucking feels it before anyone else, and we’ve been feeling it for a while.”

Word of the closing comes even as Roadway’s unionized employees here and across the country vote whether to accept a 10 percent pay cut. Those ballots were expected to be counted today in Washington, D. C., but bad weather extended the vote through Tuesday. The pay cut is expected to pass, Nelligan said.

“[Workers] understand the country is in bad shape as a whole,” he said.

The American Trucking Associations’ index of monthly freight tonnage blipped up in November but basically has been on a downward trend that saw it hit its lowest mark in five years the month before.

During the first half of 2008, meanwhile, nearly 2,000 trucking companies went out of business, the highest level since 2000-’01, according to industry analyst Donald Broughton of Avondale Partners. During the period, more than 88,000 trucks, or about 4.5 percent of the country’s capacity, were idled, Broughton estimates.

Tuesday, December 30, 2008

Company moves operations to Charlotte

YRC Worldwide Inc., the parent company for Yellow Transportation and Roadway Express Inc., will move its consolidation and distribution functions from Kernersville to Charlotte, a company official said Tuesday.

As the company completes this change, it will just have a local pickup and delivery operation in Kernersville, said Michael Smid, the president and chief executive of YRC North American.

"We just do not need two of those types of operations in the North Carolina area," Smid said.

About 210 employees in Kernersville will be affected by the changes. They are drivers, dock workers and employees who supply support functions. It may also include office workers and some mechanics.

The company should complete the merger of networks by March 1, Smid said. The affected employees have been told about the company's decision.

It has a distribution center under the Roadway brand on N.C. 66 South in Kernersville. The company has a distribution center under the Yellow brand at 1200 Amble Drive in Charlotte.

"The majority of these employees will have the opportunity to either move with the work or pursue the work in Charlotte or potentially other facilities in the region," Smid said. "So it's not a complete reduction or elimination of jobs. It's a repositioning and relocation of work."

Mayor Dawn Morgan of Kernersville said that she was saddened by the company's decision.

"This is not good news for Kernersville," Morgan said. "Over the years, Roadway employees have been key volunteers here."

The employees are members of the Teamsters Local Union 391 in Winston-Salem, and permitted to follow the work.

"If they choose not too, they will go into a lay-off status," Smid said.
The union learned about the company's plan Monday, said Bob Brown, an union business agent.

"We will not have any comments on it until we meet with the company," Brown said.

Local Job Loss And Financial Info

The Triad economy suffers more bad news with word that two companies are being affected by the recession right before the New Year. Video........

Roadway to close most of local facility

Tannersville terminal to lose estimated 143 jobsRoadway Express will close most of its Tannersville terminal by March 1, transferring or eliminating an estimated 143 jobs as part of a nationwide consolidation of the trucking company's operations.

The move will affect 55 drivers, 42 transfer dock workers, 25 mechanics plus other employees. Most of those jobs will be moved to other facilities.

Just a few jobs related to pickup and delivery will remain in Tannersville; the exact number is unclear.

"Tannersville will be a much smaller operation than it is today," said Mike Smid, president of YRC North America. YRC owns Roadway Express and Yellow Freight and is combining the companies. According to Smid, integration of the Yellow and Roadway will create the largest trucking operation in North America.

At the Yellow location in Allentown, 19 jobs will be gained, while Roadway in Allentown will lose 37 jobs.

Roadway's Tannersville location has experienced several staff reductions in the last few years. In recent weeks some Tannersville workers have been furloughed because of the season and economics.

Of the Tannersville workers affected "most will have opportunities to follow work to locations that are gaining work," Smid said. Those locations have not yet been determined. First, a change-of-operations hearing must be held with the Teamsters union, which represents the workers. That will happen in January, but the exact date and location has not been determined.

The "change of operations" is a document for the union which states the intentions of a company.

"It's a massive change. Probably one of the biggest I've ever seen," said a business agent who declines to give his name at Local 229 Teamsters in Scranton, the home union for Tannersville Roadway employees. Yellow and Roadway job transfers and work-force reductions are planned across North America.

"YRC is being forced to make changes in an attempt to cut costs. Unfortunately that will have some impact on our members. We will work tirelessly to ensure their contract rights are enforced and their seniority is protected," said Leigh Strope, a spokeswoman for the Teamsters.

Tannersville is one of 450 truck terminals in the United States owned by YRC North America.

CEO Zollars: YRC faces 'hard, long road'

YRC Worldwide Inc., a giant in an industry that’s a harbinger of economic feast or famine, has been fighting a downturn for about two years.

Theoretically, the Overland Park, Kan.-based trucking company will be among the first to show signs of recovery. But CEO Bill Zollars said he doesn’t expect improvement anytime soon.

“It will be a hard, long road back to recovery,” Zollars said. “The earliest we could expect it to start would be the second half of next year.”

The company monitors its shipments daily, watching for the increase in shipment size and then numbers that typically mark the beginning of recovery. Those figures, which usually show an uptick about six months before the rest of the economy, haven’t appeared yet, he said.

That means YRC will “continue to be kind of relentless on costs” to ride out the downturn, he said.

During the past year, the company laid off more than 5,000 employees, including 50 in St. Louis and 150 in Edwardsville, Ill.. The company also closed service centers and recorded hundreds of millions of dollars in impairment charges. In early December, YRC reached a tentative agreement with union employees to cut their wages 10 percent and suspend cost-of-living adjustments in exchange for a 15 percent ownership stake. The company also took steps to adjust the cost structure for nonunion workers.

YRC serves nearly 800,000 customers in most industry segments, Zollars said, but the customer base generally can be divided into half retail and half manufacturing — sectors that have shown general deterioration for about 15 months.

In addition, YRC has been trying to integrate its Yellow Transportation and Roadway divisions. Once done, the process will mean better service and efficiency, Zollars said. It’s been accelerated because of good results but has contributed to the layoffs and closures.

Zollars advocates fast action on some type of economic stimulus when Barack Obama is sworn in as a first crucial step to jump-start the economy.

“It’s really a function of getting consumer sentiment to stabilize and then turn around,” he said. “Right now, people have really stopped spending money.”

When YRC emerges on the other side of the recession, it and others that survive will be much more efficient, effective and stronger, Zollars said.


In the midst of ever-important cost-cutting, companies should avoid the tendency to eliminate strategic expenses, such as investments in technology and training, said Bill Zollars, CEO of YRC Worldwide Inc.

“That’s a mistake a lot of companies make,” he said. “You have to resist the temptation to try and cut back on those, and look long-term.”

Major Trucking Company Downshifting

Sunday, December 28, 2008

Yawning Danger

Trucking companies are unwisely given an 11th hour at the 11th hour

Last week, safety advocates petitioned the federal government to reconsider a recent decision to allow truckers to work longer hours. The new regulations deserve more than reconsideration; they ought to be completely dismissed as a regrettable four-year experiment by the Bush administration.

Truckers used to be limited to driving no more than 10 hours straight, but in 2004, the industry successfully lobbied to have them expanded on an interim basis to 11 hours.

Has the 11th hour made the roads more dangerous? Are 11th-hour drivers more likely to be involved in crashes? Some research suggests no, and that's the evidence sited by the Federal Motor Carrier Safety Administration when it granted the rule change in November. But advocates say the government's analysis relies heavily on one study from the Virginia Tech Transportation Institute that is deeply flawed (depending, for instance, on truckers being videotaped; the presence of a camera onboard likely affected their performance).

The bulk of 35 years of research, the petitioners point out, shows that the performance of long-haul truck drivers diminishes even before the 10-hour limit is reached. And while the number of highway fatalities was down the last two years, it went up the first year the new rules were in place. Recent safety improvements to roads and vehicles as well as lower average highway speeds may be masking the effect of the longer hours.

The trucking industry supports the new rules, but a lot of truckers, including the Teamsters, oppose them. Certainly it's hard to see how forcing drivers of 80,000-pound vehicles to spend an extra hour behind the wheel is as risk-free as the trucking companies claim.

Reversing the rule won't be easy for the incoming administration. But repealing it, along with other questionable regulatory actions taken by the Bush administration during its own 11th hour, ought to be a high priority for President-elect Barack Obama.