YRCW merges management operations for Yellow Transportation and Roadway

Jeff Berman, Senior Editor -- Logistics Management, 1/16/2007

OVERLAND PARK, Kan.—Less-than-truckload transportation services provider YRC Worldwide (YRCW) rolled out two major organizational changes yesterday, which will directly impact two of its largest properties—Yellow Transportation and Roadway.

The company’s first announcement is that it will combine the Yellow Transportation and Roadway management teams, which it said will provide accelerated business growth and streamline efficiencies. The second announcement is the introduction of its Enterprise Solutions Group, which it said will provide customers with easier access to the complete service portfolio of YRCWs brands.

Bill Zollars, YRCW chairman, president, and CEO, said in a press release these initiatives follow the company’s strategy to gain scale and build greater capabilities through its Roadway and USF company acquisitions, as well as its ongoing expansion in China.

“YRC Worldwide now has the comprehensive service portfolio needed to support ongoing, profitable growth in the U.S. and around the world,” said Zollars.

Under the new management structure, the company’s YRC Transportation and Roadway subsidiaries will be entitled YRC National Transportation. This operation will be overseen by Mike Smid, the newly-named president and CEO of YRC National Transportation. Smid was previously president of Roadway.

Smid told Logistics Management that this change is the next natural step of evolution for the YRC Transportation and Roadway brands.

“There still will be two distinct brands in the marketplace—Yellow Transportation and Roadway,” said Smid. “The real purpose of taking the next steps [with consolidating management of these companies] is that the majority of our work so far has been behind the scenes and a reduction in some of the basic support costs of running a business of this scale with a lot of back-office type efforts.”

And the consolidation of these organizations, according to Smid, puts YRCW in a different position facing the market, which will result in more significant differentiation of the two brands, the next steps in efficiency and opportunities for the company to move freight more efficiently and be more aggressive in terms of its cost structure.

“There are elements of opportunity for cost reduction, but this is a much more significant effort towards growth in the marketplace and a more significant approach to connecting these carriers to the global supply chain. We will increase the number of services we offer,” said Smid.

Some services cited by Smid include the continued development of time-specific and dedicated services that will be designed to be more applicable to certain segments and industry verticals in the marketplace. He added that some services will promote and support end-to-end solutions on an international basis in places like Asia, as well as information flow and the flow of goods and services for the supply chains of certain logistics providers.

As for shipper benefits, Smid said the management merger will respond to some of the more specific transportation requirements its customers have, such as supply chain engineering, design, and speed to response.

Enterprise Solutions Group
Yellow’s new Enterprise Solutions Group will offer its largest and most sophisticated customers (those that are heavily involved with various transportation projects and programs, like buying expedited and premium services, international services, among others) with a YRC senior management level contact that has the ability to help clients make service contacts and represent the entire portfolio of YRCW services. These services include regional services, its Meridian IQ subsidiary, and transportation services.

This news comes on the heels of the company’s January 8 announcement to consolidate its USF Bestway and USF Reddaway operations—which are part of YRCWs YRC Regional Transportation subsidiary—into one entity under the USF Reddaway brand. This new operation, according to the company, will provide direct service to Alaska, Colorado, Idaho, Montana, Oregon, Utah, and Washington. YRCW said this move will provide customers with more regional delivery options, as well as simpler and more streamlined customer service. Along with this consolidation, YRCW also said it would expand service coverage for its USF Holland operation into Arkansas, Kansas, and Mississippi.