Rogers is out as President of YRC Freight
September 23, 2013
Less-than-truckload (LTL) transportation services provider YRC Worldwide announced late last week that Jeff Rogers, President of YRC Freight, its largest group, is no longer with the company.
Company officials said Rogers will be replaced by YRCW CEO James Welch.
Rogers previously served as president of YRC’s Holland segment before taking the reins at YRC Freight in September 2011.
Led by Rogers and Welch, YRC Freight implemented a comprehensive change of operations plan earlier this year that the company described as a key component of YRC Freight’s strategy to continuously improve customer service by reducing the handling of shipments and excess time in transit.
“On behalf of the entire YRCW Board of Directors, management team and entire employee base, I want to thank Jeff for his service at Holland and YRC Freight,” Welch said in a statement. “While the regional companies (Holland, Reddaway and New Penn) continue to provide best-in-class service and more than market competitive margins, we recognize that we have additional work to do at YRC Freight and we are committed to taking the necessary steps to move our business forward. Our first priority will be working through the recent optimization of the YRC Freight network, which was designed to enhance the consistent, reliable, quality service that our customers expect and deserve.”
In August, YRC narrowed its quarterly loss to 39.6 million on $1.243 billion revenue, compared with a net loss of $104.2 million on $1.251 billion revenue in the 2012 second quarter. Consolidated operating income decreased slightly from $15.5 million to $14.3 million, or by $1.2 million. Operating income in 2013 included a $1.3 million loss on asset disposals compared to $6.5 million gain on asset disposals in 2012.
The Overland Park, Kan.-based company reported adjusted earnings before interest, taxes and debt (EBITDA) for the second quarter of 2013 of $74.7 million, a $4.6 million improvement over the $70.1 million adjusted EBITDA reported for the second quarter of 2012. Included in adjusted EBITDA for the second quarter of 2013 is a $6.3 million charge related to the network optimization that was implemented at YRC Freight in May 2013.
Welch described the quarter as “steady progress” toward it long-term objective of regaining “a leadership position in the LTL industry.”
Welch compared the company’s recent change of operations to “doing engine maintenance on a Boeing 777 at 40,000 feet.” There was no luxury of calling a timeout for two weeks while incorporating the change, which involved moving some 800 employees, closing or consolidating some terminals and basically improving line-haul to reduce fuel, empty miles and increase efficiency. It was a huge undertaking, he said.
“You can’t ask 20,000 customers to take a timeout and not move freight,” he said on the second quarter earnings call. “We had to do this while running 24/7. Historically we have been pretty good at change of operations. We didn’t want to ignore the $25-to $30 million in savings we’re confident of achieving.”
Those savings are coming, he said, but first came slightly higher operating costs from the change. “We just faced a lot of headwinds that were a little tougher than expected,” Welch explained. “But we’re taking that short term pain for a long term gain.”
BB&T Capital Markets analyst Thom Albrecht wrote in a research note that even though revenue at YRC Freight, which makes up 65 percent of all YRCW revenues is headed in the right direction, he described the pace as disappointing.
“Clearly, the rate of improvement has stalled,” Albrecht wrote. “ Rogers was instrumental in the YRC Regional (~35% of revenues) turnaround and his background prior to that was at a parcel carrier. Long-haul LTL freight has its own operational and marketing challenges different from regional LTL and certainly from parcel. It is likely that he took Freight as far as his skillset allowed.”
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