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YRCW takes reorganization to a new level
William B. Cassidy, Senior Editor | Nov 13, 2019 2:28PM EST
YRC Worldwide expects to have about 64 fewer standalone terminals by the end of 2020. Photo credit: YRC Worldwide.
Ten years after a near-fatal brush with bankruptcy, YRC Worldwide once again is resizing and reorganizing its less-than-truckload (LTL) network, in some cases bringing regional and national subsidiaries under the same roof. The company is seeking greater freight density, faster service from locations closer to shippers, and a more stable platform on which to build profits after racking up losses in much of 2019.
This streamlining of the network and “co-habitation” of national and regional LTL brands within its terminals will bring the number of facilities operated by the LTL trucking holding company across its four subsidiaries down from a current 384 to 320 by the end of next year, Darren Hawkins, CEO, and T.J. O’Connor, president and COO, said in an interview with JOC.com.
The consolidation is the third part of a five-step long-term strategic plan that builds on steps taken by Hawkins' predecessor, James Welch, who steered YRCW back to profitability after being named CEO in 2011. After network optimization, the next steps are customer growth initiatives to build volume and additional capital investment, Hawkins said.
The Overland Park, Kansas-based company expects to complete 25 terminal consolidations this year and another 25 next year, they said. And when it comes to optimization, “we think we’re just scratching the surface,” Hawkins said. “We’re doing this as opportunities present themselves and being very methodical, so there’s not any adverse impact on the customer.”
In comparison, YRC Freight alone had 571 terminals after the 2009 merger of Yellow Transportation and Roadway Express. The current network optimization plan is the latest in a series of consolidations meant to increase freight density and improve customer service and profitability, including consolidation post-merger in 2012 and 2013, and changes in 2017.
The latest changes go beyond the consolidation of the physical plant to embrace sales, management, and back-office changes that will transform the way the company and its subsidiaries operate, enough so that its top executives hope the transformation will restart a recovery in profitability that seems to have stalled in the slow freight market of 2019.
No mergers planned
All of YRCW’s carriers are among the top 25 US LTL trucking companies, with YRC Freight ranked fourth, Holland 11th, Reddaway 19th, and New Penn 22nd, according to SJ Consulting Group data. The operating company’s consolidated revenue topped $5 billion in 2018. The LTL holding company ranks sixth among the 50 largest US trucking companies.
The carriers represent a significant source of LTL capacity for shippers, giving them a stake in its success. YRC Freight moves approximately 10.1 million shipments annually an average distance of 1,250 miles. The YRC regional companies combined move about 9.8 million shipments an average distance of 400 miles each year, according to YRC Worldwide’s latest annual report.
Click to enlarge.
Hawkins expects the consolidation and resulting new operations structure to provide $60 million to $80 million in margin improvements in 2020, as well as millions of dollars in cash proceeds from property sales. He and O’Connor stressed the terminal consolidation and “co-habitation” of national and regional carriers does not represent — in any way — a merger of brands.
“We’re not taking down any brands, they’re all vibrant and powerful in the marketplace,” Hawkins said. But the brands will operate differently going forward. Until now, they’ve been largely autonomous subsidiaries, with their own sales and management teams as well as terminals. That is changing quickly, with many off-road functions transferred to YRCW.
For example, about 80 administrative jobs at the former Lebanon, Pennsylvania, headquarters of Northeast regional carrier New Penn have been eliminated and the work shifted to the YRC Worldwide Field Resource Center in Overland Park. The back-office consolidation launched a flurry of merger rumors but didn’t affect New Penn LTL services or field operations.
YRCW also consolidated and reorganized its sales force this year, giving customers a single point of contact for the three regional carriers, YRC Freight, and non-asset subsidiary HNRY Logistics. “I would point out there's been no change in terminal management by brand,” in the consolidation, O’Connor said. “The YRC Freight and regional managers remain the same.”
What’s changing is the corporate reporting structure for the four brands. A single operations leadership team, divided into four divisions and 17 operational areas, now exists for Holland, New Penn, Reddaway, and YRC Freight. Managers at each brand ultimately report to Don Hinkle, vice president of operations, who in turn reports to YRCW COO O’Connor.
“This structure allows us to share resources among the carriers more fluidly, because the terminal managers report to the person who is responsible for all brands,” said O’Connor.
Hawkins stressed the importance of maintaining the brands. “We're very proud of our four brands. We've got three best-in-class regionals. Reddaway is celebrating its centennial this year, and our other companies are nearing that mark. We're in a negative tonnage environment right now but the whole industry has been there the last 12 months.”
YRCW's predecessor company, Yellow, acquired New Penn when it purchased Roadway in 2003. Holland and Reddaway were added to the group through the acquisition of USF in 2005.
Shippers shouldn’t even be aware of many of these behind-the-scenes changes, unless as a result of improved service, Hawkins and O’Connor claimed. “T.J.’s rule of thumb is that we will [consolidate terminals] where we would see service improve and efficiency improve and not in a market where consolidation would take away services,” Hawkins said.
Contact William B. Cassidy at [email protected] and follow him on Twitter: @willbcassidy.
See the rest of the story on Part 2 below.
https://www.joc.com/trucking-logist...-takes-reorganization-new-level_20191113.html
William B. Cassidy, Senior Editor | Nov 13, 2019 2:28PM EST
YRC Worldwide expects to have about 64 fewer standalone terminals by the end of 2020. Photo credit: YRC Worldwide.
Ten years after a near-fatal brush with bankruptcy, YRC Worldwide once again is resizing and reorganizing its less-than-truckload (LTL) network, in some cases bringing regional and national subsidiaries under the same roof. The company is seeking greater freight density, faster service from locations closer to shippers, and a more stable platform on which to build profits after racking up losses in much of 2019.
This streamlining of the network and “co-habitation” of national and regional LTL brands within its terminals will bring the number of facilities operated by the LTL trucking holding company across its four subsidiaries down from a current 384 to 320 by the end of next year, Darren Hawkins, CEO, and T.J. O’Connor, president and COO, said in an interview with JOC.com.
The consolidation is the third part of a five-step long-term strategic plan that builds on steps taken by Hawkins' predecessor, James Welch, who steered YRCW back to profitability after being named CEO in 2011. After network optimization, the next steps are customer growth initiatives to build volume and additional capital investment, Hawkins said.
The Overland Park, Kansas-based company expects to complete 25 terminal consolidations this year and another 25 next year, they said. And when it comes to optimization, “we think we’re just scratching the surface,” Hawkins said. “We’re doing this as opportunities present themselves and being very methodical, so there’s not any adverse impact on the customer.”
In comparison, YRC Freight alone had 571 terminals after the 2009 merger of Yellow Transportation and Roadway Express. The current network optimization plan is the latest in a series of consolidations meant to increase freight density and improve customer service and profitability, including consolidation post-merger in 2012 and 2013, and changes in 2017.
The latest changes go beyond the consolidation of the physical plant to embrace sales, management, and back-office changes that will transform the way the company and its subsidiaries operate, enough so that its top executives hope the transformation will restart a recovery in profitability that seems to have stalled in the slow freight market of 2019.
No mergers planned
All of YRCW’s carriers are among the top 25 US LTL trucking companies, with YRC Freight ranked fourth, Holland 11th, Reddaway 19th, and New Penn 22nd, according to SJ Consulting Group data. The operating company’s consolidated revenue topped $5 billion in 2018. The LTL holding company ranks sixth among the 50 largest US trucking companies.
The carriers represent a significant source of LTL capacity for shippers, giving them a stake in its success. YRC Freight moves approximately 10.1 million shipments annually an average distance of 1,250 miles. The YRC regional companies combined move about 9.8 million shipments an average distance of 400 miles each year, according to YRC Worldwide’s latest annual report.
Click to enlarge.
Hawkins expects the consolidation and resulting new operations structure to provide $60 million to $80 million in margin improvements in 2020, as well as millions of dollars in cash proceeds from property sales. He and O’Connor stressed the terminal consolidation and “co-habitation” of national and regional carriers does not represent — in any way — a merger of brands.
“We’re not taking down any brands, they’re all vibrant and powerful in the marketplace,” Hawkins said. But the brands will operate differently going forward. Until now, they’ve been largely autonomous subsidiaries, with their own sales and management teams as well as terminals. That is changing quickly, with many off-road functions transferred to YRCW.
For example, about 80 administrative jobs at the former Lebanon, Pennsylvania, headquarters of Northeast regional carrier New Penn have been eliminated and the work shifted to the YRC Worldwide Field Resource Center in Overland Park. The back-office consolidation launched a flurry of merger rumors but didn’t affect New Penn LTL services or field operations.
YRCW also consolidated and reorganized its sales force this year, giving customers a single point of contact for the three regional carriers, YRC Freight, and non-asset subsidiary HNRY Logistics. “I would point out there's been no change in terminal management by brand,” in the consolidation, O’Connor said. “The YRC Freight and regional managers remain the same.”
What’s changing is the corporate reporting structure for the four brands. A single operations leadership team, divided into four divisions and 17 operational areas, now exists for Holland, New Penn, Reddaway, and YRC Freight. Managers at each brand ultimately report to Don Hinkle, vice president of operations, who in turn reports to YRCW COO O’Connor.
“This structure allows us to share resources among the carriers more fluidly, because the terminal managers report to the person who is responsible for all brands,” said O’Connor.
Hawkins stressed the importance of maintaining the brands. “We're very proud of our four brands. We've got three best-in-class regionals. Reddaway is celebrating its centennial this year, and our other companies are nearing that mark. We're in a negative tonnage environment right now but the whole industry has been there the last 12 months.”
YRCW's predecessor company, Yellow, acquired New Penn when it purchased Roadway in 2003. Holland and Reddaway were added to the group through the acquisition of USF in 2005.
Shippers shouldn’t even be aware of many of these behind-the-scenes changes, unless as a result of improved service, Hawkins and O’Connor claimed. “T.J.’s rule of thumb is that we will [consolidate terminals] where we would see service improve and efficiency improve and not in a market where consolidation would take away services,” Hawkins said.
Contact William B. Cassidy at [email protected] and follow him on Twitter: @willbcassidy.
See the rest of the story on Part 2 below.
https://www.joc.com/trucking-logist...-takes-reorganization-new-level_20191113.html