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

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.

By ·

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, 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. Contact Jeff Berman

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!

Latest Whitepaper
Refining TMS Integration Outside the Four Walls of the Warehouse
How shippers can use a modern transportation management system (TMS) to successfully integrate across the supply chain ecosystem and create a truly digital network.
Download Today!
From the October 2017 Logistics Management Magazine Issue
A leading distributor of professional salon products in the U.S. forms unique partnerships with its key LTLs to lower transport costs, reduce its carbon footprint and improve service to its 565 store locations.
Q4 2017 Rail/Intermodal Roundtable: Improvements apparent; work remains
LM Viewpoint: Collaboration, Now more than ever
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
EDITORS' PICKS
SalonCentric: One Beautiful Network
A leading distributor of professional salon products in the U.S. forms unique partnerships with its...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...