Wednesday, April 22, 2009

USF Holland consolidating Holland terminal operations into Grand Rapids service center

USF Holland Inc. is closing its Holland terminal and consolidating that into its Grand Rapids service center in Wyoming, the Holland-based trucking firm announced Wednesday.

The company's headquarters, 750 E. 40th St., will remain.

The consolidation of the firm's West Michigan operations to 4600 Clyde Park Ave. SW is part of a continued effort to reduce costs, according to a company statement.

Service to West Michigan will not be affected, according to the company.

Celebrating its 80th anniversary this year, USF Holland employs about 500 people in West Michigan.

"Many employees will have the opportunity to move to the Grand Rapids facility," a company spokeswoman said.

Last month, the company closed 11 terminals in Kansas, Maryland, New York, Pennsylvania and Virginia, affecting about 350 employees.

Arkansas Best slips to loss in Q1

Transportation holding company Arkansas Best Corp. reported a loss in its first quarter, reflecting significantly lower freight levels, hurt by poor economy, and a very competitive pricing environment.

For quarter, the company posted a net loss of $18.16 million or $0.73 per share, compared to a net income of $8.54 million or $0.34 per share last year. The company noted that the quarterly results included $0.15 per share costs from the ABF RPM initiative compared to $0.10 per share in the preceding year.

Quarterly operating revenues fell to $339.68 million, a per-day decrease of 22.9%, from $447.51 million in the same quarter a year ago. Operating loss was $28.60 million, versus operating income of $13.15 million in the prior year. Interest and dividend income plunged to $930 thousands from $1.82 million in the previous year.

ABF Freight System, Inc., the largest subsidiary of Arkansas Best, generated revenues of $323.11 million, lower than last year's $427.75 million. Total billed revenue per hundredweight was $23.85, a decrease of 9.4%, compared to $26.32 in the prior year. The decline was mainly due to the steep decline in fuel surcharge compared to the first quarter of 2008. Other revenues and eliminations were $16.56 million, in comparison with $19.76 million in the preceding year.

Tuesday, April 21, 2009

YRC Worldwide completes agreement to defer pension fund payments

YRC Worldwide Inc. has finalized an agreement that lets it put off certain pension fund payments until Jan. 1 by using company real estate as collateral.

The amended credit agreement, signed Wednesday, keeps YRC’s $950 million senior revolving credit facility and a $111.5 million senior term loan in place, YRC (Nasdaq: YRCW) said in a Monday filing with the Securities and Exchange Commission. Parties include YRC and some subsidiaries and lenders that include JP Morgan Chase Bank.

YRC’s stock closed on Monday at $3.53, down 59 cents, or 14 percent, on volume of 1.86 million shares, according to Yahoo Finance. The stock’s average daily volume the past three months is 2.35 million shares.

According to the amended agreement, YRC can delay payment of certain multiemployer benefit fund contributions to no sooner than Jan. 1 and grant first-priority liens on some company-owned real estate to secure the payments.

YRC said April 13 that it had asked its lenders and union, the International Brotherhood of Teamsters, for permission for such an arrangement. The company’s monthly pension fund payments range from $34 million to $45 million.

The amendment doesn’t allow YRC to voluntarily make any deferred payment before Aug. 15, unless a payment comes from cash received for real estate that was securing the payments.

YRC will keep a smaller portion of cash from a sale-leaseback deal and be allowed to sell fewer assets, each decreased by amounts proportionate to the net book value of the collateral but not to exceed $50 million. YRC also can enter debt-for-equity swaps and pay some debt with cash from issuing equity.

Hoffa discusses troubled YRC

With trucking company YRC Worldwide Inc. struggling to survive, Teamsters general president Jim Hoffa said he understood the concerns of the company’s drivers and dock workers.
“I’m frustrated and worried about this company, too,” Hoffa said last week at the Teamsters union hall in Kansas City. “How do we get back to a strong economy that allows them to be successful again? This recession is taking away their customers.”

Hoffa was in town on Friday to give the union’s endorsement of Missouri Secretary of State Robin Carnahan, a Democrat who has announced her candidacy for the U.S. Senate in 2010.

YRC, which operates carriers employing more than 1,000 area Teamsters, said last week that it was negotiating with its lenders and the union’s pension funds about putting real estate up as collateral in place of pension payments. Those monthly pension payments ranged from $34 million to $45 million, depending on the number of people working.

That drew criticism from YRC hourly workers, who three months ago accepted a 10 percent wage cut to help the company preserve cash in the midst of the weak economy and declining loads. Rank-and-file union members were planning to protest with an informational picket at YRC’s Overland Park headquarters last Friday until it was learned that such an action would violate the national contract.

Last week Hoffa said he was monitoring the situation, although any changes YRC had proposed regarding pension payments would be negotiated with the various trustees of the funds. Hoffa did confirm that YRC made a payment to the health-and-welfare portion of the pension funds at last week’s deadline, preventing the suspension of those benefits that would have occurred this week.

On Monday in a regulatory filing, YRC said it had come to an agreement with its lenders that would allow the company to defer pension payments until at least Jan. 1.

The Kansas City area has thousands of current workers and retirees who belong to the Central States Pension Fund. After UPS Inc. withdrew from the fund last year, YRC became the biggest contributor.

Hoffa said YRC was the only national contract in which the Teamsters union had agreed to concessions during this recession. The union had worked with the carrier hoping to keep the company operating, he said.

“It’s a big employer, with 40,000 of our members,” Hoffa said. “Including families, you’re talking about more than 100,000 people who would be affected by a shutdown. We’re doing what we can, but we can’t go out and find customers for them. That’s up to the company.”