Thursday, March 12, 2009

YRC Worldwide stock jumps on expectation of improved second quarter

YRC Worldwide Inc. expects significant improvement in the second quarter as internal cost-saving initiatives, such as the integration of two subsidiaries, take effect.

Integrating Yellow Transportation and Roadway is expected to mean about 1,000 more job cuts in the second and third quarters.

Bill Zollars, CEO of the Overland Park-based trucking company (Nasdaq: YRCW), presented the information at a JPMorgan Aviation and Transportation Conference on Wednesday. Around 2 p.m., YRC’s stock was trading at $2.76, up 76 cents, or 38 percent, according to Yahoo Finance.

At the end of 2008, Yellow and Roadway had 521 facilities, 37,000 employees and 16,700 trucks. Around the March 1 integration, about 2,000 employees and 70 facilities were cut. By the end of the year, the combined unit is expected to have 430 facilities, 34,000 employees and 14,000 trucks.

YRC also countered what it described as concerns about employee morale from “questionable sources.” Voluntary turnover by nonunion employees dropped to 1.2 percent in the first quarter of 2009, compared with 2.2 percent in the first quarter of 2008. An anonymous nonunion employee survey from Feb. 17 showed nearly 60 percent of employees were more optimistic than last year and about 75 percent think the CEO is improving the company.

Zollars pointed out that union employees, who represent about 70 percent of the company’s work force, had approved pay cuts by a 77 percent margin.

This year, YRC expects an additional $100 million in proceeds from excess property, as well as significant sale-leaseback deals, including more than $270 million finalized or under contract, the presentation said.

Without economic recovery, the company expects to save $500 million going into 2010 from the integration and from union and nonunion pay cuts, traded for ownership stakes in the company.

However, YRC didn’t give any indication that the long-struggling freight industry was recovering and said its first-quarter results would be disappointing. The economy shows no significant signs of imminent improvement, and volume drops have sped up throughout YRC business units as the economy hits customers. Some volume decreases have come from YRC’s efforts to shed less profitable customers.

YRC ranks No. 2 on the Kansas City Business Journal’s list of area public companies.

Wednesday, March 11, 2009

70 laid off in merger of truckers

The merger of two area trucking terminals operated by Roadway and Yellow Transportation has resulted in about 70 layoffs.

YRC Worldwide, which owns the Roadway and Yellow business units, announced last December that it would close its Roadway Express terminal in West Seneca this month and integrate its functions with Yellow’s Town of Tonawanda terminal.

While layoffs were expected, the number was not clear until the merger took effect. The layoffs were in a variety of job categories, said Tracy Memoli, a YRC Worldwide spokeswoman. A more specific breakdown of the cuts was not available.

Ken Nelligan, president of Teamsters Local 449, said some road drivers displaced by the cuts have transferred to jobs at terminals elsewhere, including Rochester. But finding jobs for the rest is difficult, since many other trucking companies have also laid off drivers due to the poor economy, he said.

The Tonawanda terminal now has a work force of 550, Memoli said. That includes road drivers, dock workers, pickup and delivery drivers, mechanics, switch drivers and utility employees.

Yellow Corp. bought Roadway in 2003. The impact of the integration of the Yellow Transportation and Roadway networks has been felt around the country this month. YRC Worldwide said it closed certain facilities in places where there were overlaps between the two existing networks. The combined entity has 450 locations, down from 600 before the merger.

YRC Worldwide by the fourth quarter expects to improve its operating income by a run rate of $200 million as a result of integrating the Roadway and Yellow networks. YRC Worldwide reported a $974 million loss in 2008.

Earlier this year, the company announced that Teamsters members at Yellow, Roadway and its two other business units approved contract modifications. The changes included a 10 percent reduction in wages paid and the suspension of cost of living adjustments for the rest of the contract.

In exchange, Teamsters-represented employees received a 15 percent ownership stake in YRC Worldwide. Nonunion employees also had their wages reduced and received options to purchase up to a 7 percent ownership stake in the company.

Tuesday, March 10, 2009

Con-way rolls out steps to reduce expenses

Taking steps to combat light volumes, excess capacity and dismal market conditions, freight transportation services provider Con-way Inc. said in an 8-K filing it has introduced several expense-cutting initiatives to enhance its position in what it called a “challenging operating market.”

These initiatives, which the company expects to save it between $100 million to $130 million in 2009, come at a time when tonnage at Con-way Freight, its less-than-truckload (LTL) subsidiary was down roughly 12.5 percent year-over-year through February.

The cost reduction initiatives as outlined by Con-way include:

*suspension of certain 401(k) contributions including the company match;

*reduction of 10 percent in the salaries of Con-way Inc. President and CEO Douglas W. Stotlar and certain other members of the senior leadership team;

*base wage and salary reductions of 5 percent for all other executives and employees at Con-way Freight and Con-way Inc., including administrative services and trailer-manufacturing entities;

*a change in Con-way’s primary defined-benefit pension plan, which eliminates a provision for retirement benefit increases based on future increases in employee compensation rates;

*a change in vacation/paid time off policies (PTO) at Con-way Freight and Menlo Worldwide with respect to when PTO hours are earned and recorded as expense; and

*a reduction of 10 percent in the annual retainer paid to non-employee members of Con-way’s Board of Directors

Full Story.....

Monday, March 09, 2009

Safety Advocates Ask Court to Overturn Bush 'Midnight Regulation'

The Teamsters, Public Citizen, Advocates for Highway and Auto Safety, and the Truck Safety Coalition asked an appeals court today to review a dangerous Bush-era regulation that increased the amount of time truck drivers can spend behind the wheel.

The groups also sent a letter to Transportation Secretary Ray LaHood asking him to begin work on a new regulation that would reduce truck crashes caused by fatigue.

"We have taken this action with the conviction, based on research and scientific data, that longer driving and working hours are unsafe and promote driver fatigue," the letter said.

The rule, which took effect in 2003, was twice thrown out by the court. It allows truck drivers to drive for 11 hours, one more hour than they were allowed before the 2003 rule. It allows them to drive as many as 77 hours in seven days or 88 hours in eight days, over 25 percent more than previously.

The D.C. Circuit Court's 2004 decision focused on the Federal Motor Carrier Safety Administration's (FMCSA) failure to address the serious health impact of its rule on the regulated drivers.

FMCSA's latest version of rule, which followed after the court threw out an identical 2005 rule, was issued on Nov. 13, just weeks before President Obama took office. The rule went into effect on Jan. 19, 2009.

"I urge the Obama administration to change direction on truck safety," said Teamsters General President Jim Hoffa. "The last administration completely disregarded the health and safety of truck drivers. I'm confident President Obama will do better."

"Twice now the court has found wanting the agency's justifications for this unsafe and unhealthy rule," said Bonnie Robin-Vergeer, the Public Citizen attorney who represents the four petitioning groups. "Insisting on the same flawed rule over and over is no substitute for complying with Congress' mandates."

"It is illogical and unacceptable that the prior Administration's solution to truck driver fatigue was longer working and driving hours, said Jackie Gillan, vice president for Advocates for Highway and Auto Safety. "Public health and safety is at stake and there needs to be a new rule."

Added Joan Claybrook, president of Citizens for Reliable and Safe Highways, a member of the Truck Safety Coalition, "The Bush Administration's rule put industry profits in the driver's seat and public safety in the back seat. This needs to be reversed now."

Trucking jobs fell 2.5% in February

Continuing a string of unprecedented percentage decreases, the trucking industry lost 33,400 employees on a seasonal basis in February -- a 2.5 percent drop from January, according to preliminary figures released March 6 by the Bureau of Labor Statistics.

The 33,400 trucking jobs lost in February represent 5.1 percent of the net 651,000 nonfarm payroll jobs lost. And the rate of decline in trucking employment in February far exceeds that of the 0.5 percent employment decline in the overall economy.

Trucking employment was down 1.8 percent in January, 1.3 percent in December and just less than 1 percent in November. Each decline was the highest recorded monthly percentage drop at the time except for April 1994 during a Teamsters strike. Since October, trucking employment is down 6.4 percent.

Trucking employment is down 11.8 percent from its peak of 1.45 million in January 2007, according to BLS figures.

UPS Freight Improves Transit Times for Service to Michigan, Wisconsin

In its continuing drive to improve service, UPS Freight today announced accelerated transit times for large sections of Wisconsin and Michigan.

The enhancements by the heavy freight arm of UPS include next-day service between new direct points in Wisconsin and Michigan linking Chicago, Minneapolis and Milwaukee.

“Today’s improvements extend the reach of our next-day service and shorten transit times for central and western Wisconsin and Michigan’s Upper Peninsula,” said Todd Holt, vice president for line transportation. “We are constantly working to improve the network to meet the expectations of today’s customers, who are seeking nothing less than the best out of their transportation provider.”

The 480 Zip codes covered by the new, faster times represent the single largest number of codes affected in a single day’s change by UPS Freight this year. In February, UPS Freight announced improved transit times on 2,250 lanes affecting customers throughout Texas and southern Oklahoma. That enhancement covered some 385 Zip codes.

In all, UPS Freight has reduced transit times on some 15,500 lanes over the last 21 months.

As in previous enhancements, the new transit times will be covered by UPS Freight’s time-definite guaranteed service for all shipments moving under the current 560 Tariff. In addition, enjoying the same capabilities as UPS small package customers, UPS Freight’s LTL customers can manage, track and process their shipments through UPS WorldShip and Quantum View Manage technology.