Subscribe to our free, weekly email newsletter!


LTL news: YRCW is latest carrier to roll out a 2011 rate increase

By Jeff Berman, Group News Editor
July 20, 2011

Less-than-truckload (LTL) transportation services provider YRC Worldwide (YRCW) is the most recent market player to announce a 2011 general rate increase (GRI).

The company yesterday rolled out an average GRI of 6.9 percent which will cover non-contractual shipments in the United States, Canada, and Mexico, with increases varying by lane and shipment type, according to company officials.

And YRCW added that these rate hikes will take effect on August 1 and apply to minimum charge, LTL rates, and accessorial charges, with domestic Canada rates not being impacted.

This increase follows matching 6.9 percent increases announced in recent weeks by UPS Freight and Con-way, Freight, which also take effect on August 1, and ABF Freight System, whose increase kicks in on July 25.

Satish Jindel, president of Pittsburgh-based SJ Consulting, recently told LM that these rate increases are a good thing, because the LTL industry needs to become more profitable.

“The market is getting tighter, and it is a good time for this,” he said. “Capacity is part of this in terms of the two types of capacity the industry deals with: one being fixed capacity and the other being variable capacity.”

Regarding the latter, Jindel said it is very tight at the moment, as it involves driver availability, which is very challenging at the moment.

While raising rates is seen as key for recovering revenues lost during the recession, Jindel said there are other effective ways to address this situation. One way is for LTL carriers to charge for what they actually handle.

While these LTL carriers have each announced pending GRI increases, the situation at YRCW is somewhat more fluid, given its financial struggles and its upcoming earnings call on Friday, which is expected to shed more light on its financial restructuring plan.

The company recently announced it has obtained commitments for a three-year, $400 million asset-based loan (ABL) facility that will replace its current asset-backed securitization (ABS) facility.

Company officials said that commitments for the ABL facility are in compliance with agreements the company reached with key stakeholders on April 29 regarding its financial restructuring plan. And they added that YRCW expects to close its restructuring this month.

“Replacing the ABS facility with this new facility should improve the company’s liquidity,” said John Lamar, chief restructuring officer and lead director of YRC Worldwide, in a statement. “That helps support our industry’s seasonal pattern of revenues and provides the financial flexibility and run room we need to grow the business.”

YRCW has lost in excess of $2.7 billion the last four years, reported a $102 million loss in the first quarter on a 5.6 percent rise in revenue to $1.1 billion, compared with a $233 million loss in the 2010 first quarter.

During its first quarter earnings announcement, YRCW said it has engaged Morgan Stanley to arrange a new $400 million asset-based loan facility that CEO Bill Zollars said will “enhance our liquidity and strengthen our balance sheet.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

When it comes to Congress actually getting its act together on a new long-term federal transportation bill, things remain as status quo as it gets, with the big takeaway being nothing really ever gets done, when it comes to passing a badly overdue and needed bill, rather than these band-aid extensions Congress keeps signing off on.

Truckload and intermodal pricing was up on an annual basis, according to the December edition of the Truckload and Intermodal Cost Indexes from Cass Information Systems and Avondale Partners.

While the official numbers won’t be issued until early February in its quarterly Market Trends & Statistics report, preliminary data for the fourth quarter and full-year 2014 intermodal output from the Intermodal Association of North America (IANA) indicates that annual growth was intact.

Almost all companies today are aware of their labor or material costs... but what about energy consumption? It all comes down to having the energy data needed to determine what actions you must take to improve. The payoff is worth it, as insight into energy data allows you to make more valuable, relevant operating decisions.

With lower energy prices sparking domestic economic gains, coupled with solid manufacturing and industrial production activity, improving jobs numbers, and a GDP number that shows progress, there is, or there should be, much to be enthused about when it comes to the economy and the economic recovery, which has been raised and discussed and dissected from basically every angle possible, it seems. But that enthusiasm regarding the economy needs to be tempered, because big headline themes seldom tell the full story at all really.

Article Topics

News · Trucking · LTL · YRC Worldwide · YRC · Less-Than-Truckload · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA