Freight volume: Tough times may be receding

Though the slump in freight volume is expected to continue for the rest of the year, many transportation providers believe the toughest stretch may now be in the rearview mirror. And if the downturn removes weaker competitors from the playing field, some companies believe that may open up opportunities for growth and market share gains.

"I do not foresee a significant change in the current freight environment as we move through the third quarter. However, there has been a slight improvement in volume trends,” said Henry Gerkens, president & CEO of Landstar System in the carrier’s second quarter earnings report.

“In addition, some of the very difficult revenue comparisons experienced during the first half of 2009 begin to ease toward the end of the 2009 third quarter and into the 2009 fourth quarter,” he noted. “I believe the worst is over.”

That being said, however, Gerkens stressed that there continues to be some level of uncertainty in the marketplace. He noted Landstar’s revenue continued to be negatively impacted by the severe recession in the domestic and global economies during the second quarter, with earnings shrinking to $17.9 million on revenues of $491.2 million, compared to $29.8 million in earnings on revenues of $697.7 million in the same period last year.

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YRC Worldwide is in talks to put up real estate as collateral in place of pension contributions

YRC Worldwide Inc. is negotiating with the Teamsters union and its lending group about putting up real estate as collateral in place of monthly pension contributions.

In a regulatory filing, YRC said it makes $34 million to $45 million in monthly pension payments depending on employment levels at three trucking subsidiaries, YRC Inc., USF Holland Inc. and New Penn Motor Express Inc.

The company said any agreement would not affect the current or future benefits of those participating in the pension plans.

YRC Worldwide said it has asked it lending group to release some of the $1.5 billion in assets put up as collateral last fall following a credit-rating downgrade. The company said further details will be released once an agreement is reached.

The Overland Park-based trucking company has thousands of current workers and retirees who belong to the Central States Pension Fund, run by the Teamsters. YRC Worldwide is the biggest contributor to the multi-employer plan.

Teamsters officials declined to comment on YRC’s disclosure.

However, an internal Teamsters memo to locals nationwide said YRC was seeking payment deferrals to pension funds for several months, according to a report on the Journal of Commerce’s Web site.

In its annual report, the Central States fund reported $17.3 billion in pension assets at the end of 2008, down from $26.8 billion a year earlier. Much of that loss was blamed on the stock-market collapse last year.

The report of YRC Worldwide’s talks with the union comes a week after Bill Zollars, YRC’s chairman and chief executive, told analysts that freight demand remained very weak.