YRC: Regional Units to Profit in 3Q
NEW YORK (AP) - The president and chief executive of YRC Worldwide Inc., the nation's largest less-than-truckload carrier, said Wednesday he expects the company's regional businesses to be ``back on track'' in the third quarter, in the wake of a major restructuring.
Less-than-truckload, or LTL carriers, usually fill their trucks with freight from a variety of sources and might re-sort and redistribute it at a company terminal along their route.
Speaking at the BB&T Transportation Services Conference, Bill Zollars said he sees the company ``beginning to recover'' from its recent decision to close 27 service centers across its USF Holland and USF Reddaway divisions in the second quarter, and regain profitability in those businesses in the third quarter.
The company said last week the closures would result in $10 million in costs, and affect 1,100 workers. The centers will close on Feb. 22.
Zollars estimated Wednesday that YRC would lose about $100 million in revenue from the restructuring, but noted a majority of the lost revenue would be made up for in regained profitability after the companies are downsized.
Zollars said the reason for the companies' lack of profitability was ``about one-third from the economy, and about two-thirds from a self-inflicted move.''
``The basic problem was that we extended the footprint past its natural point. We ended up with lots more costs, and when we got there, we ended up with an unprofitable business,'' Zollars said. ``We got ourselves in a little bit of a death spiral there, and it ended up in a very poor performance in the second half of
2007.''
Across the broader company, Zollars said he's currently seeing an increase in weight per shipments, which is considered to be an indication of improving freight demand.
Still, ``some other signs are a bit troubling,'' he said.
Zollars predicts that freight demand will remain weak for at least a few more months before any possible uptick is seen.
``It feels to us that we are at the bottom. The question is, how long we are going to stay at the bottom.''
Shares fell 47 cents, or 2.8 percent, to $16.64 in midday trading.
Less-than-truckload, or LTL carriers, usually fill their trucks with freight from a variety of sources and might re-sort and redistribute it at a company terminal along their route.
Speaking at the BB&T Transportation Services Conference, Bill Zollars said he sees the company ``beginning to recover'' from its recent decision to close 27 service centers across its USF Holland and USF Reddaway divisions in the second quarter, and regain profitability in those businesses in the third quarter.
The company said last week the closures would result in $10 million in costs, and affect 1,100 workers. The centers will close on Feb. 22.
Zollars estimated Wednesday that YRC would lose about $100 million in revenue from the restructuring, but noted a majority of the lost revenue would be made up for in regained profitability after the companies are downsized.
Zollars said the reason for the companies' lack of profitability was ``about one-third from the economy, and about two-thirds from a self-inflicted move.''
``The basic problem was that we extended the footprint past its natural point. We ended up with lots more costs, and when we got there, we ended up with an unprofitable business,'' Zollars said. ``We got ourselves in a little bit of a death spiral there, and it ended up in a very poor performance in the second half of
2007.''
Across the broader company, Zollars said he's currently seeing an increase in weight per shipments, which is considered to be an indication of improving freight demand.
Still, ``some other signs are a bit troubling,'' he said.
Zollars predicts that freight demand will remain weak for at least a few more months before any possible uptick is seen.
``It feels to us that we are at the bottom. The question is, how long we are going to stay at the bottom.''
Shares fell 47 cents, or 2.8 percent, to $16.64 in midday trading.
posted by Chuck Demastus at
7:57 PM
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