Thursday, February 18, 2010

Trucking failures to accelerate this year

Bankruptcies in the U.S. trucking industry are expected to escalate this year as higher fuel prices and excess capacity squeeze margins further and lenders start to tighten their noose on the sector.

The highly fragmented freight market in the United States has been in recession for about three years now. Excess capacity has put pressure on pricing and dented margins at truckers as well as freight brokers.

But the sector has not seen as many insolvencies as expected in the last two years, as lenders wait for the market to improve for the used trucks they hold as collateral.

Last year, lenders helped YRC Worldwide, the No.1 U.S. trucker, narrowly avoid bankruptcy.

Industry analysts say a spike in bankruptcies might not be a bad thing after all for the sector -- it will take away hundreds of underperforming companies, suck out the excess capacity and finally narrow the gap between supply and demand. Complete story....

Wednesday, February 17, 2010

Challenging year for US truckers - but better prospects ahead

Following the release of the results of a number of US logistics companies, it is possible to give an update on the state of the US market. Undoubtedly it was another difficult year for logistics companies of just about all types.

Looking positively, the largest player in the less-than-truckload market, YRC Worldwide, is still in business despite reporting a pre-tax loss of $899 million. This compared with a full-year pre-tax loss in 2008 of $1,147 million. Many financial analysts had believed that the company would not be able to meet its financial commitments, given the level of its debts. Good news for this company, however, meant that the rest of the market had to struggle on without the boost to volumes which YRC's demise would have provided. Complete story.....

YRC shareholders approve stock deal

Clears way for $70 million private placement

Newly issued stock eligible for the Nasdaq exchange

Stock plunges about 29 pct

YRC Worldwide said on Wednesday that shareholders had agreed to a series of measures aimed at giving former debt holders equity control and helping the troubled U.S. trucking giant regain its financial footing.

The approvals, the latest moves in a broad financial restructuring by YRC, should nearly clear the path for it to focus on rebuilding its business, YRC Chairman Bill Zollars said in an interview with Reuters.

"This was kind of the final piece in the puzzle," Zollars said. "We're now accumulating enough positive news here, I think we'll reach a tipping point with customers with which we'll see an increase in momentum of them coming back." Full Story....

Tuesday, February 16, 2010

Hoffa Says Teamsters to Build on YRC Success

Union must save existing jobs while organizing new companies, Hoffa says

The Teamsters are ready to put the muscle they used against Wall Street to help YRC Worldwide into action against fresh opponents, says General President James P. Hoffa.

"We took on the big banks to save YRCW and we're going to keep taking on big companies like Coca-Cola," Hoffa told representatives from more than 200 Teamsters locals in the brewery and beverage industries today in Washington.

Hoffa underscored the need to save existing Teamster jobs while organizing new companies, including FedEx. "There is one (labor) law for FedEx and another law for UPS," he said, referring to the Railway Labor Act and National Labor Relations Act. Complete Story......