Freightmaster1
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https://www.freightwaves.com/news/y...lts-while-investors-count-their-burnt-fingers
Like most of its less-than-truckload (LTL) carrier brethren, YRC felt the sting of declining revenues and volumes in the second quarter. However, unlike other carriers who reported year-over-year improvements in their operating ratio (OR) – the ratio of revenues to expenses – YRCs ratio went the other way. Its long-haul unit, YRC Freight, reported an increase in OR to 98 percent from 96.8 percent. Its regional unit – comprised of three carriers – fared worse, posting a ratio of 99.4, up from 94.1 percent. The trends are unfavorable because they indicated that YRC spent more for each dollar in revenue it generated.
For both units combined, second-quarter operating income in the quarter was impacted by a one-time, $12.4 million charge for increased vacation benefits called for under a five-year collective bargaining agreement with the Teamsters, which was ratified in mid-May. YRC blamed much of the bottom-line weakness on higher costs associated with the agreement, which was retroactive to April 1, 2019, with little, if any, of the benefits accruing to the company in the quarter. Uncertainty over the labor outlook also hit revenues in the quarter as customers either were reluctant to tender freight to YRC or diverted traffic to rivals. Union leadership had warned YRC’s rank-and-file in the early spring that failure to ratify the agreement would likely result in the company’s collapse by Memorial Day because customers would flee in droves.
YRC has begun to close service centers – most of which it doesn’t operate from – as part of a plan to shutter 25 centers by the end of 2019. The moves will generate $25 million in cash proceeds, YRC said. It has also shut the New Lebanon, Pennsylvania headquarters of regional unit New Penn Motor Express and consolidated its corporate functions at YRC’s headquarters in Overland Park, Kansas. That will save the company about $25 million a year, it said.
Increased efficiencies as part of the company’s “network optimization” program will result in $80 million in margin improvements during 2020, Hawkins predicted.
Like most of its less-than-truckload (LTL) carrier brethren, YRC felt the sting of declining revenues and volumes in the second quarter. However, unlike other carriers who reported year-over-year improvements in their operating ratio (OR) – the ratio of revenues to expenses – YRCs ratio went the other way. Its long-haul unit, YRC Freight, reported an increase in OR to 98 percent from 96.8 percent. Its regional unit – comprised of three carriers – fared worse, posting a ratio of 99.4, up from 94.1 percent. The trends are unfavorable because they indicated that YRC spent more for each dollar in revenue it generated.
For both units combined, second-quarter operating income in the quarter was impacted by a one-time, $12.4 million charge for increased vacation benefits called for under a five-year collective bargaining agreement with the Teamsters, which was ratified in mid-May. YRC blamed much of the bottom-line weakness on higher costs associated with the agreement, which was retroactive to April 1, 2019, with little, if any, of the benefits accruing to the company in the quarter. Uncertainty over the labor outlook also hit revenues in the quarter as customers either were reluctant to tender freight to YRC or diverted traffic to rivals. Union leadership had warned YRC’s rank-and-file in the early spring that failure to ratify the agreement would likely result in the company’s collapse by Memorial Day because customers would flee in droves.
YRC has begun to close service centers – most of which it doesn’t operate from – as part of a plan to shutter 25 centers by the end of 2019. The moves will generate $25 million in cash proceeds, YRC said. It has also shut the New Lebanon, Pennsylvania headquarters of regional unit New Penn Motor Express and consolidated its corporate functions at YRC’s headquarters in Overland Park, Kansas. That will save the company about $25 million a year, it said.
Increased efficiencies as part of the company’s “network optimization” program will result in $80 million in margin improvements during 2020, Hawkins predicted.
. Good luck.
