The U.S. economy and freight volumes will show no meaningful recovery at least through the first half of next year, putting further pressure on less-than-truckload rates and near-term profitability for LTL carriers, the chairman, president, and CEO of YRC Worldwide Inc. predicted.
William D. Zollars said he expects a continued "challenging environment" for both volumes and pricing through the end of June. While Zollars said YRC sees a more favorable climate in the second half of 2010, he added that "we're not betting on the economy bailing us out," Zollars spoke in an interview with consultancy TranzAct Technologies Inc.
Zollars, whose company earlier this month negotiated a debt-for-equity swap under which YRC bondholders will exchange nearly $600 million in debt for effective equity control of the company, said YRC will be cash-flow positive in 2010 and that operating cash flow metrics are steadily improving. "We are a much stronger company than we were going into the recession," he said.
YRC, the nation's largest LTL carrier, has reduced capacity by between 25 and 30 percent in 2009. Zollars said he is satisfied with the downsizing of the YRC network. "Our capacity fits our volumes pretty well" at this time, he said in the interview.