YRC Regional Carriers Turn Profitable

YRC Worldwide’s regional carrier group reported a $293,000 profit, its first since the second quarter of 2008, largely driven by a turnaround at former USF regional carrier Holland, said YRC Worldwide Chief Operating Officer Tim Wicks.

YRC Regional drove into the black despite a 33.5 percent drop in total revenue year-over-year to $338.7 million. Total tonnage was down 24.2 percent to 1.6 million tons, while total shipments dropped 21.5 percent to 2.4 million. Revenue per hundredweight was down 12.2 percent to $10.47.

“The turnaround at Holland has led the dramatic improvement in this segment’s performance,” Wicks said in a conference call with analysts Oct. 30. “An increased focus on the next-day market at Holland contributed to the improvement.”

Earlier in October, Holland expanded its next-day options by introducing overnight service between the greater Springfield, Mo., area and its Chicago, Joliet, Rockford and Wheeling service centers in Illinois, covering more than 124,000 ZIP code lane pairs.

The YRC Regional group also managed to draw more freight in the quarter, increasing its tonnage by 0.4 percent in the quarter from 1,610,000 tons to 1,617,000 tons. "That's better than many of their healthier competitors," said Satish Jindel, president of SJ Consulting, Pittsburgh.

Total shipments were almost flat quarter-to-quarter, at 2,442,00 compared with 2,478,000 in the previous quarter.

Reductions in the carrier group's workforce and assets may have helped shift it into higher gear. YRC Worldwide is undergoing a significant downsizing as it tries to adjust to lower freight demand.

Union and nonunion drivers at Holland and New Penn also saw substantial wage and salary cuts, as well as a suspension of pension benefits, after they approved new Teamsters contracts.

YRC Worldwide’s regional LTL group includes Holland, which operates in the Midwest; New Penn, a Northeastern carrier; and Reddaway, with a Western territory. Except for New Penn, the carriers came to YRC as part of its 2005 acquisition USF.

Contact William B. Cassidy at wcassidy@joc.com.