Wednesday, December 09, 2009

Chicago Teamsters Reject YRC Concessions

Local drivers, dockworkers say 'no' a third time to wage, benefit cuts

YRC Worldwide Teamsters in Chicago again rejected wage and benefit cuts approved by the most of the unionized employees at the troubled less-than-truckload company.

It was the third time the YRC drivers and dockworkers were asked to vote on a 15 percent wage cut and 18-month suspension of pension contributions already approved by the majority of union employees at YRC Worldwide’s national and regional companies.

City drivers in Teamsters Local 705 rejected the concessions 234 to 132 Dec. 8, while dockworkers in Local 710 voted them down 337 to 319. Only maintenance workers in Local 710 accepted the cuts, voting to approve them 8 to 4.

The union “is disappointed in the results and will await the company’s response,” Tyson Johnson, international vice president and National Freight director, said in a statement. Full Story.....

YRC pushes back key deadline in $537M debt-for-equity swap

YRC Worldwide Inc. has again pushed back a crucial deadline on a move that could determine the future of the debt-strapped company.

The Overland Park-based trucking giant said Wednesday that it has pushed back by a week the deadline for a deal in which the company is asking bondholders to exchange about $537 million in debt for what would be 95 percent of YRC’s common shares. The company needs to get 95 percent of bondholders to sign on to make the deal work; about 72 percent had agreed by the previous Tuesday deadline, the company said in a release. Also, the Securities and Exchange Commission still needs to declare YRC’s registration statement for the bonds effective, which is a condition of the offers.

The new deadline is 10:59 p.m. on Dec. 15.

YRC said it was “encouraged by the response to the offers,” which followed several months of work on a turnaround plan to solidify the company’s financial base.

YRC has told bondholders that if the deal to wipe out about a third of its debt fails, the company could file bankruptcy, in which case they could get nothing. The company also has the option of asking its lenders to lower the 95 percent participation threshold.

The trucking company has laid off thousands, shut down numerous facilities and sold property to combat the effects of the recession. The company, whose revenue fell 45 percent in the third quarter, has negotiated more lenient terms from lenders and pension funds and two rounds of concessions from union workers.

Tuesday, December 08, 2009

Con-way To Expand Truck Fleet and Regional Freight Operations

Con-way Truckload Regional, the short-haul subsidiary of the American freight giant Con-way Inc., has announced that it is to expand its regional service with increased operations across ten U.S. states from January next year.

The company states it is to add 300 trucks to its fleet by the end of 2010 and plans significant growth in Missouri, Kansas, Iowa, Nebraska, Wisconsin, Minnesota, Illinois, Indiana, Ohio and Kentucky.

Con-way says that the expansion is due to high user demand for the regional service, which they introduced in September, and has experienced an extremely positive response from customers.

This, they state, is due to their ability to provide specialist services like time-sensitive requirements and greater flexibility in meeting various logistical needs that a dedicated regional presence gives them, whilst at the same time offering links for freight shipments directly into their long-haul, consolidation and distribution services.

“Con-way Truckload Regional has been a great success, and we’ve seen a clear demand for this offering in a growing number of regions,” said Herb Schmidt, president, Con-way Truckload.

“With our available network of secure, state-of-the-art facilities and the ability to expand without adding infrastructure, we see a tremendous opportunity for strategic growth. We’re moving forward to maximize the potential of that opportunity,” he added.

With some of their rivals in the North American trucking market distinctly in the doldrums, noticeably rival YRC, it seems that Con-way’s innovation in opening up new markets and the services to exploit them is paying off.

Trucking Industry Delivers Wreaths Across the U.S. to Honor Soldiers

Sunday, hundreds of trucks left Harrington, Maine carrying special deliveries of hand made wreaths as a part of Wreaths Across America. They are traveling across the nation to honor our fallen soldiers and assure that they are remembered during this holiday season.

There are numerous routes traveling across the country, with volunteers meeting the convoys at state and national cemeteries for ceremonies and to help lay wreaths. A special convoy will arrive in Arlington National Cemetery Saturday with a presentation beginning at 8:30 a.m. and wreath laying beginning at 9 a.m. You can follow the convoy here. A complete list of the routes can be seen here.

"In organizing the transportation and logistics for the wreath deliveries, I was touched with how many trucking companies and professional drivers volunteered to assist in this remembrance," said Barry Pottle, of Pottle's Transportation. "We have trucks delivering wreaths all across the country -- it really demonstrates just how big hearted the trucking industry is."

Share the Road professional drivers Kurt Pedersen (Con-way Freight) and Ben Saiz (ABF Freight System) are running routes to South Carolina, Georgia and Florida. America's Road Team Captain John Foran (UPS) will deliver to cemeteries in New Hampshire and Vermont.

Outcome of YRC trucker bond exchange in question

* Debt exchange expires on Dec. 8

* Successful swap would reopen $106 mln revolver reserve

* YRC shares drop 4 cts to $1.14

Market observers were expressing skepticism on Monday that troubled U.S. trucking giant YRC Worldwide would be able to pull off a critical debt exchange offer that expires Tuesday, though company officials have expressed confidence the deal would be successful.

Shares of Overland Park, Kansas-based YRC closed down 4 cents at $1.14 on the NASDAQ on Monday as investors weighed the likelihood of a successful exchange, which for YRC requires 95 percent of bondholders to approve the deal.

"I'd be shocked if they get 95 percent," said Dahlman Rose analyst Jason Seidl. "The question is can they get enough so that the lenders will sign off on it."

YRC, the nation's top less-than-truckload carrier, has been struggling to stay out of bankruptcy, laying off thousands of workers and cutting deals with labor and lenders to stay afloat. Full Story....

Component Change Made to Dow Jones Transportation Average

YRC Worldwide Inc. will be deleted from the Dow Jones Transportation Average at the close of business on Friday, December 11. The company will be replaced by Delta Air Lines Inc.

YRC Worldwide Inc. is being removed because of its plans for financial restructuring of the company. YRC Worldwide has proposed a debt-for-equity swap, which ultimately would give noteholders control of about 95% of the company's common stock. If not enough bondholders agree to the exchange, many observers expect that YRC Worldwide Inc. could file for bankruptcy protection, which disqualifies a stock from being a component in any of the Dow Jones Averages.

YRC Worldwide has been in the Dow Jones Transportation Average since August 8, 1995 under the name Yellow Roadway Corp. The company changed its name to YRC Worldwide Inc. on January 4, 2006.

UPS Freight expanding hours in Canada

UPS Freight is expanding its pickup and delivery hours for customers served through the company's London, Ontario, facility.

The expanded service puts trucks on the street 1½ hours earlier each morning for deliveries in the Ontario area. The vehicles will stay out three hours later for pickups.

Coupled with improvements to the UPS Freight operating network and cross-border route structure, customers will be able to tender freight as much as three hours later in the day and still reach two-day delivery destinations as far south as Mississippi.

Yesterday's service announcement complements a yearlong effort to reduce transit times to and from Canada. In all, nearly 1,000 transit times between Canadian points and the United States have been reduced in 2009.

"This expansion of our service hours demonstrates the very deep commitment that we're making to customers on both sides of the Canada-U.S. border," said UPS Freight President Jack Holmes. "For freight shipments to and from Canada, UPS Freight is the standard others will be measured against."

UPS Freight also announced that veteran Canadian transportation specialist Allan Robison had joined the company as a vice president of sales and will lead UPS Freight's Canadian sales efforts. Until his retirement last year, Robison worked as president of Canada's largest trucking company, Reimer Express.

Monday, December 07, 2009

Pricing turmoil clouds outlook for LTL market

When does rate-cutting morph into throat-cutting?

That may be a reasonable question for trucking executives to ponder as they start 2010. That is, if they aren't too busy beating each other up over pricing to think through the consequences of their actions.

As a grinding freight recession ended its third year, the rate environment for truckload and, in particular, less-than-truckload services, continued to weaken. Pricing trends in both categories deteriorated considerably in the third quarter from the first half of 2009, according to data culled from company reports and compiled by investment banker JPMorgan Chase. Even railroad pricing on commodities for which the rails compete with truckload carriers has been hurt by the weakness in truckload rates, according to the firm. Only ground and express parcel services showed a sequential pricing improvement through the first three quarters of 2009, according to the JPMorgan data.

Industry veterans have rarely seen anything like it. Michael Regan, CEO of TranzAct Technologies Inc., an Elmhurst, Ill.-based consultancy that over the years has negotiated and purchased billions of dollars of LTL capacity for shipper clients, says he's seen discounts of as much as 90 percent below retail, or tariff, rates.

The pain is being felt across the carrier spectrum. For example, two of the healthiest LTL carriers, Old Dominion Freight Line Inc. and Con-way Inc., posted sub-par revenue and net income results in the third quarter of 2009, with the top executives at both companies attributing their respective performances to declines in tonnage and aggressive pricing competition. Full Story....