Sunday, October 11, 2009

Sharks circle as YRC struggles to stay afloat

Rivals slash rates in effort to lure customers away from beleaguered LTL carrier.

As YRC Worldwide Inc. struggles with ongoing financial problems, its competitors are turning up the pressure. For months, the LTL carrier's rivals have engaged in aggressive pricing efforts in a bid to undercut YRC's market leadership (the carrier has a 15-percent share of the fragmented LTL market) and grab some or all of its business. The effectiveness of these efforts has fueled ongoing concerns about YRC's survival.

The latest challenger is FedEx Freight, according to analysts at JPMorgan Chase attending the American Trucking Associations' annual conference in Las Vegas. In a research note, analyst Thomas R. Wadewitz said FedEx Freight seems to have made a "push to gain market share" against YRC and other carriers over the past month. "The effort to attract tonnage through price cuts appears to be relatively broad and aggressive," Wadewitz wrote, adding that the program is "likely to contribute to further pressure on LTL market pricing and also to result in further pressure" on YRC. A YRC spokesman was unavailable for comment. Full Story..........

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