UPS Unveils New Car Design for Russ Friedman 400

NASCAR fans will see a different look for the No. 6 UPS Ford Fusion this weekend when David Ragan hits the track at Richmond International Raceway for the Russ Friedman 400 presented by Crown Royal.

Taking a break from the traditional brown UPS paint scheme, Ragan’s car will feature a special UPS Freight design to promote the Richmond, Va.-based division of UPS. The design incorporates the gray of UPS Freight with new brown and gold trim using a unique paint formula that includes crushed glass to make the vehicle sparkle.

UPS Freight offers a wide range of ground freight shipping options for customers who need to ship anything from a single oversized package to a heavy pallet or full truckload of freight across North America, Puerto Rico, Guam and the U.S. Virgin Islands.

“Everyone at UPS, and especially our Richmond facility employees, are thrilled to have UPS Freight featured on David Ragan’s car for this weekend’s race,” said UPS Freight President Jack Holmes. “It’s very gratifying to have our employees recognized in such a prominent and unique way.”

To kick off the Richmond race weekend, Ragan will make a special appearance at the UPS Freight headquarters today to spend time with local UPS employees. UPS Freight employs nearly 2,000 people in the Richmond area and roughly 17,000 total around the country.

In addition to the special UPS Freight paint scheme, the UPS Freight Charlotte Service Center will be featured on the wing of Ragan’s No. 6 Ford as part of UPS’s “Maximum Center” program. UPS launched the program this year to recognize UPS operating facilities for accomplishments in service, safety and performance.

“It’s neat to mix things up a bit throughout the season; to have a different look with UPS Freight onboard the No. 6 car at Richmond will be fun for our entire UPS team,” said Ragan. “There are many UPS Freight employees who are big racing fans, and I hope to thank them for their support by getting our UPS Freight Ford Fusion into Victory Lane this weekend.”

Capacity rationalization still needed in trucking industry

Implications

This article, while sounding draconian, accurately reflects the trucking industry's excess capacity still chasing too little demand. So, what is the impact, now and in the future, between transportation suppliers and consumers?

Consider the following points: 1. With excess capacity still in the market, a majority of agreements between shippers and carriers are probably based solely on price (rates and discounts). 2. When the economy eventually rebounds, it will be leaner and more efficient across a breadth of industries. Accordingly, the surviving carriers will be those with streamlined linehaul operations, updated "back-office" and in-cab technology coordinating deliveries in a rationalized network minimizing the number of empty miles. 3. Lesson to be learned: Carriers -- improve/optimize now. Shippers --- develop your relationships now as price points will adjust upward once supply and demand are rebalanced.

Analysis

A contemporary example of the impact of the industry's capacity rationalization is the recent annnouncement by ABF to consolidate and realign its operations.

In a nutshell, they are seeking efficiencies and it's analogous to an airline improving yield management by allocating the right size aircraft on the right length flight to carry the maximum number of passengers per mile. In trucking, it's very similar; the more direct the route, with fully loaded trailers, the better. This simply means less handling (less labor cost & potential for damage) and greater density per mile traveled. All of this adds up to better efficiency, which will drive costs lower.

Only the fittest will survive in this industry over the next 2-3 years. Those carriers that emerge on the other side of this recession will then be positioned to provide shippers with efficient distribution networks. However, I suspect they will have long memories of which companies negotiated with them now only on price instead of developing strategic supplier relationships as part of building a robust supply chain for the future.

YRC Negotiates $351 Million in Sale/Leasebacks

YRC Inc. and USF Reddaway Inc., subsidiaries of YRC Worldwide Inc., continue to shed their ownership in trucking facilities across the country.

The two trucking transportation groups entered into another real estate sales contract with Estes Express Lines to sell and simultaneously lease back more trucking facilities throughout the United States.

The aggregate purchase price for the subject facilities is $32 million and initial annual lease payments would be $2.9 million in total.

The new Estes contracts are in addition to similar deals struck earlier this year for $122 million.

Separately, YRC, USF Holland Inc. and New Penn Motor Express Inc., also each YRC Worldwide subsidiaries agreed to sell and leaseback additional facilities to unidentified investors. The aggregate purchase price is $70 million and initial annual lease payments to be $6.1 million in total.

Both deals include a few facilities that were originally a part of another transaction with a different buyer.

Previously YRC and USF Reddaway also struck a deal to sell and leaseback facilities with NATMI Truck Terminals LLC. That deal was amended so that deals could be struck with the latest buyers. Originally to total $150.4 million, the amended deal will total $127 million, of which $111 million in deals closed in the first quarter of 2009.

The company expects to close on all of the new and remaining deals this quarter.

USF Holland trucks 45 jobs out of Mansfield

In a statement released Tuesday, the Holland, Mich.-based trucking company said its facility at 792 Fifth Ave. will be shuttered and operations consolidated elsewhere in Holland’s regional network.

Currently 45 employees work out of the Mansfield terminal, although the Holland officials did not say how many are drivers and how many are support personnel. The statement said the majority of employees will have the opportunity to transfer to the surrounding Holland facilities.

“We made significant investments in our company during the first quarter to enhance our position in the market and improve our future operating performance,” said Bill Zollars, Chairman, President and CEO of YRC Worldwide, which owns USF Holland. “Unfortunately, the economy progressively weakened throughout the quarter, making it more challenging to get ahead of the volume declines.”

Shifting operations out of Mansfield, Holland plans to serve customers from its Buffalo, Cleveland and Youngstown service centers “in order to support ongoing efforts to improve service performance, reduce costs and maintain competitiveness,” the statement said.

No closing date for the Mansfield terminal was released, though the company said it is currently planning action for the first half of June.

The announcement comes on the heels of a March report that USF Holland was closing 11 terminals in Maryland, New York, Pennsylvania, Virginia and Kansas, affecting 350 employees. This week, the transportation service provider named five additional facilities to be shut down, including the Mansfield operation.

Overland Park-based YRC Worldwide rolls with economy’s changes

YRC Worldwide Inc. cut more than 10 percent of its work force in the first three months of the year.

While discussing its first-quarter financial results with analysts last week, officials said YRC Worldwide laid off about 5,700 employees companywide in the period. The job reductions were due to the weak economy affecting business and also because of operations merging as YRC combined its two national carriers, Yellow Transportation and Roadway.

YRC has its headquarters in Overland Park and operates three truck terminals in the area. A company spokesman said a breakdown of the layoffs by area was not yet available.

YRC Worldwide had about 55,000 employees at the end of 2008, according to a recent regulatory filing. The employment level after the most recent reductions also means the company has about 11,000 fewer employees than it did this time last year, said Bill Zollars, YRC’s chairman and chief executive.

Although the size of YRC’s local work force has declined, the area has managed to avoid any facility closings. YRC, the name of the merged national trucking firm, continues to operate two area terminals. USF Holland, a regional carrier operated by the company, also has kept an area terminal.

USF Holland, which operates mainly in the Midwest, has been hit particularly hard by the production cuts and plant closings in the auto industry. Zollars said the company recently announced that Holland would close five more terminals.

One analyst asked whether the decision by General Motors Corp. to close many plants in the spring and summer, along with the potential of GM and Chrysler filing bankruptcy, would affect YRC Worldwide’s results.

“Our corporate exposure to the auto industry is not significant, but there is more exposure in Holland,” Zollars said. As a result, Holland is trying to diversify its customer base, he said.

Zollars said it was unclear whether business had bottomed out for the freight industry, a sector that usually acts as a leading indicator for the overall economy.

With the recent merger, YRC has made strides in customer service and productivity, both of which should continue to improve, he said.

“But the wild card is the economy,” he said. “We’ve sort of seen a couple of head fakes in the past when we thought the economy stabilized, and then it took another step down. There are a lot of new parts here, and it’s too early to make any kind of call on the second quarter.”

Roadway Receives 2009 NASSTRAC Carrier of the Year Award for 19th Consecutive Year

Roadway, a YRC heritage brand, announced today that it has been named "2009 Carrier of the Year" by the National Shippers Strategic Transportation Council and Logistics Management magazine.

The annual program recognizes transportation providers on a quantitative scale in five key areas: customer service, operational excellence, pricing, business relationship, leadership and technology.

"For the 19th consecutive year, we are pleased to receive this prestigious industry award," said Mike Smid, President YRC. "Our dedicated team has an outstanding reputation, and we are proud that our efforts continue to exceed the challenging demands in the transportation industry."

The 2009 Carrier of the Year Awards Program will take place during the NASSTRAC Logistics Conference & Expo taking place April 26-29 at the Buena Vista Palace & Spa in Orlando, FL. Terry Gilbert, SVP, Chief Sales & Marketing Officer, YRC will accept the award on the company's behalf, and will speak briefly at the ceremony.

Smid will also speak on an industry panel at the conference titled: "Motor Carrier CEOs: 2009 Opportunities, Issues, Challenges."

The NASSTRAC Carrier of the Year program is an annual program co-sponsored by NASSTRAC and Logistics Management, a trade magazine for buyers of logistics services. Roadway has been named the NASSTRAC carrier of the year for 19 consecutive years and 20 of the 22 years the award has been given.