Thursday, January 14, 2010

LTL carriers seeing some signs of demand increase

Two carriers announce LTL rate increases

Less-than-truckload carriers are a bit more optimistic about demand today than they were even a month ago. But, pricing remains something of a mixed bag. Some carriers are focusing on competitive rates to gain market share while others are increasing rates in the hope of improving profitability.

A fourth quarter review from Wolfe Research says truck demand has been improving and "we expect LTL tonnage to improve significantly in the fourth quarter relative to recent quarters, but pricing remains very weak for, likely worse in 4Q than 3Q for LTL."

A note this morning from Longbow Research says LTL carriers are "continuing to become increasingly hopeful for further demand stabilization as a result of increased volumes from existing customers. Pricing forecasts among our contacts, however, remain very mixed due to aggressive pricing tactics by some carriers."

Longbow says their contacts cite FedEx Freight as the most aggressive LTL carrier on pricing right now, while Con-way Freight "appears to have eased its foot from its aggressive pricing strategy as it looks to focus on profitability." Con-way last year implemented an LTL pricing cap.

Some LTL carriers are taking the other approach, however, and beginning to raise rates on the expectation that demand in 2010 will be strong enough to support increases. Old Dominion Freight Lines last week announced a general rate increase of 4.4% on average. And ABF Freight System said it would increase rates 5.7% on average beginning this month.

Analysts: YRC will report a rough fourth quarter

A trucking industry analyst said he expects haulers to continue to struggle through the first half of the year, at least, and predicted an “exceptionally weak” fourth-quarter report from YRC Worldwide Inc.

Ed Wolfe, of Wolfe Research LLC, said in a research report Wednesday that YRC probably will report “massive (earnings per share) and cash-flow losses” for the fourth quarter, during which it continued to wrestle with lower shipments and lose customers worried about the company’s long-term viability. Full Story....

YRC Launches Public Campaign to Win Back Shippers

Online ads stress importance of YRC to 'competitive rates'

YRC Worldwide is engaging its competitors -- and the media -- in a fierce battle for freight and customer confidence after squelching fears of a near-term bankruptcy.

Fresh from its successful debt-for-equity swap Dec. 31, YRC Worldwide is taking its message to shippers through advertising and marketing aimed at building volume.

It's the latest attempt by the nation's largest trucker to recapture business lost over the past three years, which saw YRC Worldwide rack up more than $2 billion in losses.

The debt-for-equity swap retired $470 million in debt and transferred ownership of the company to its bondholders, triggering long-term lending and labor agreements.

With the exchange, YRC steered clear of a potential bankruptcy reorganization, with enough liquidity and reserves to roll into 2010, and fierce LTL competition.
From 2006 through 2008 YRC Worldwide's revenue shrank from $9.9 billion to $8.3 billion, and it's expected to post about $6 billion in revenue in its 2009 results.

Regaining business shippers shifted to other less-than-truckload carriers and adding new volume is now critical for the company's plans to reverse its fortunes in 2010.

YRC is heralding the success of its debt swap in online advertising with The Wall Street Journal and The New York Times, stressing the importance of its survival to shippers. Full Story....

UPS Donate $1 Million To Haiti Earthquake Relief In Cash And Freight Services

Atlanta-based freight and parcel carrier UPS has announced they are to donate more than $1 million worth of support to the international efforts to assist the survivors of the massive earthquake that hit Haiti yesterday.

The contribution shall be made up of $500,000 in cash with the rest made up of in-kind support services.

The assistance is to be split between The Red Cross, UNICEF and CARE to be used in their long-term relief efforts for the blighted country.

Speaking of UPS’ commitment Dan Brutto, president of UPS International, said that: “With hundreds of thousands of people affected, our hearts go out to Haiti.

“Through our financial commitment and logistics expertise, UPS is positioned to respond quickly to the urgent needs and tremendous suffering that have been created by the earthquake. We felt it was critical that we act fast to support the relief efforts.”

UPS is also part of the World Food Programme's Logistics Emergency Teams (LETs), who deal with the rapid response and long-term logistic requirements that are created by disaster. The initiative involves providing "loaned" logistics experts to oversee on-site disaster response, normally for a deployment of three-to-six months and UPS has stated that is prepared for the activation of its team members.

John Vera, UPS’ Americas Region Health and Safety Manager and participate in relief efforts to Haiti in 2008 after a hurricane, states that the LETS teams job in the country is extremely difficult due to the poor infrastructure.

“Our job is to respond quickly and get supplies to those who need it most, but it's not an easy task in Haiti,” said Vera.

However, the news of UPS’ efforts has started a viral rumour on the social network site Twitter, which states that UPS has agreed to ship 50lb aid parcels from the public to Haiti free-of-charge. This is NOT true. Anyone looking to offer assistance to charities working in Haiti would be better off dealing with an organisation like the Red Cross.

Tuesday, January 12, 2010

YRC Pays Wicks $800,000 to Stay

Trucking giant paid president $400,000 after debt swap as part of non-competition agreement

YRC Worldwide paid one of its top executives $400,000 this week as part of a non-competition and confidentially agreement that includes an additional $400,000 in incentive pay if he stays with the company and meets certain goals through July.

President and Chief Operating Officer Timothy A. Wicks will receive $200,000 April 1 and again on July 1 if he is still employed by YRC and if the business meets "operational and selling, general and administrative" goals by those dates, YRC said Jan. 7. Full Story.....

Standard & Poor’s raises YRC Worldwide credit rating after debt-for-equity swap

YRC Worldwide Inc. is seeing additional benefit from the recent completion of a debt-for-equity swap, with Standard & Poor’s declaring the company no longer in default.

The rating service said in a Monday release that it raised its corporate credit rating of YRC to “CCC-” from “SD,” or “selective default.” The new rating still is considered a junk rating.

It also said it raised its rating of remaining notes subject to the exchange offer to “CC” from “D” and assigned them a recovery rating of 6, meaning bondholders would have a 10 percent or lower chance of recovering their principal in the event of payment default. Full Story......