Thursday, January 21, 2010

U.S. truckers call for new safety regulations

The Teamsters Union has asked the U.S. government to reverse a regulation that increased the number of hours truckers can drive.

The regulation, which was issued in 2003, raised the number of hours truck drivers can spend behind the wheel from ten to eleven consecutive hours each shift, and from 60 to 77 hours of driving each week. The rule also cut off-duty rest and recovery time at the end of the work week from 50 or more hours off duty, to as little as 34 hours off duty.

“We must protect our truck drivers’ health and safety,” said Teamsters general president Jim Hoffa. “Study after study shows that more time behind the wheel is dangerous for truckers and for the driving public.”

The Teamsters said that the ruling was intended to increase driver productivity, and favoured increasing the profits of motor carriers over driver health and safety.

The union said that the percentage of fatal crashes that resulted from driver fatigue rose 20 per cent from 2004 to 2005, the first year in which the longer hours of driving were allowed.

YRC sets special shareholders meeting: Trucking company hopes to make $470 million debt-for-equity exchange official next month

YRC Worldwide Inc. intends to make its successful debt-for-equity swap official on Feb. 17.

That's when the struggling trucking company and parent of the former Roadway Corp. in Akron has scheduled a special shareholders meeting to consummate parts of its $470 million debt-for-equity exchange that bondholders approved on Dec. 31.

The move likely averted a bankruptcy filing for the Overland Park, Kan., company, which is the nation's largest trucker with about 35,000 employees, about 70 percent of whom are Teamsters.

At the special meeting, which will be held in YRC's corporate headquarters, shareholders will be asked to approve reducing what is called the par value of YRC stock, increase the amount of authorized shares and then approve a reverse stock split to reduce the number of common shares, according to YRC's proxy statement filed with the Securities and Exchange Commission. The proxy statement said YRC's board is not looking to take the company private.

The changes are not without risk, YRC said.

Among them, the company stock could be delisted from the Nasdaq exchange if the per-share price falls below $1, the company said. Share prices likely will fall because of the debt-for-equity swap, the company said.

In addition, YRC said it has a March 1 deadline to pay off $30 million in remaining debt or face additional pressure from lenders. YRC will need to secure financing to make the payment -- the company said it is prohibited from using operating cash to retire the notes. Some $15 million more of outstanding debt is due to mature by April 15 as well, YRC said.

The less-than-truckload company has been pummeled by the deep recession that drastically reduced freight shipments and prices YRC can charge, coupled with high levels of debt. In large part because of its finances, YRC said it also has lost business to competitors.

YRC has lost $1.7 billion in the past five quarters, and the swap removed nearly $500 million in debt from the company's balance sheet.

YRC needed to extend the swap deadline six times in December as bondholders held out.

The Teamsters lobbied the bondholders, some of whom would have profited if YRC defaulted, to make the exchange. Union members took 15 percent pay cuts -- YRC non-union employees had their pay cut by 10 percent -- and approved other changes to help YRC remain solvent.

In the debt-for-equity swap, bondholders became YRC's largest shareholder.

On Wednesday, shares closed at 88 cents. Shares are down 72.6 percent from a year ago.

Once the exchange offer is completed, as many as eight YRC directors will resign. Current directors will appoint the new directors to fill the vacant positions, who will serve until the next annual meeting.

Holland Freight announces next day service from Toronto

Next day service from Toronto to seven Midwest cities has been announced by Holland Freight, a subsidiary of YRC Worldwide Inc.

U.S cities now being serviced by Holland Freight from Toronto with next day service are Chicago; Joliet, Ill.; Wheeling, Ill.; Cincinnati; Indianapolis; and Huntington W. Va.

Holland Freight President Jeff Rogers said the move gives his company the largest next-day footprint of trucking out of Toronto among major carriers.

"Canada is one of our most profitable business lines that we want to grow through (less than truckload) deliveries," said Rogers whose companies specializes in next day service with about 73 percent of its business in that market.

Formerly operated as USF Holland, the company consolidated its terminal services from the Holland terminal last June to its Wyoming distribution plant at 4600 Clyde Park Ave. SW.

2009 likely the toughest ever for the trucking industry

It’s official. Sort of.

The American Trucking Associations' notes that in 2009 “the motor carrier industry has potentially endured the most severe drop in volumes ever.”

Lane Kidd, director of the Arkansas Trucking Association, agrees. He said most Arkansas-based trucking companies still operating were “significantly” damaged in 2009. He said they employ fewer people, have lower balance sheets and have incurred a lot of debt.

“There are a few exceptions, like (Fort Smith-based) Arkansas Best, which still has money in the bank.” Kidd said during a Tuesday (Jan. 18) interview.

Kidd has watched the trucking sector for 18 years, and 2009 was “easily” the worst in that time, with carriers suffering through a “slow, grinding squeeze on cash flow.”

The Arkansas association recently began calling about 250 small trucking operations in the state — typically firms with fewer than five trucks — as part of a membership drive. Of the about 170 calls made so far, 41% were no longer in business. Full Story.....