Less than two months after being named president of YRC, Jeff Rogers is cutting away layers of management and consolidating sales and operations in an attempt to steer the national less-than-truckload carrier back toward profitability.
He’s reviewing all aspects of the company, including its network of about 300 terminals, to identify opportunities to streamline and simplify operations at the nation’s third-largest LTL carrier. Only FedEx Freight and Con-way Freight are bigger.
“YRC has overcomplicated things for many, many years,” Rogers told The Journal of Commerce. “I think the people within YRC know that.”
He took the company another step away from that model late last month with a reorganization that eliminated several vice presidents and reduced the number of geographic territories from four to two, creating an eastern and western division.
That was his first move toward realigning the structure of the $2.9 billion long-haul unit of $4.3 billion YRC Worldwide. The LTL unit has reported more than $1.6 billion in cumulative losses, including $200 million last year.
“First and foremost, my goal is to get the company back to making money,” Rogers said. “I’m going to do what I need to do to get YRC back to being profitable. And that’s going to revolve around improving service and improving quality.”
YRC reported a $10.6 million operating profit on $826.9 million in revenue in the second quarter, following a $51.2 million loss in the first quarter on $730 million in revenue. (The company was scheduled to release its third quarter financial report on Nov. 4.)
YRC reported higher year-over-year shipment volume per day in the first and second quarters, its first consecutive quarters of positive year-over-year shipping gains since 2006, when YRC National began reporting consolidated results.
Sidebar: Slicing Into Management
Tightening LTL capacity and firmer pricing across the LTL industry could help the carrier get a stronger foothold on its finances and focus on improving operations.
LTL capacity “is not tight,” Rogers said, but “there’s not a ton of excess capacity.” That’s affecting pricing, which is “firming up” across the industry, he said.
“I feel OK from an economic and a capacity perspective,” Rogers said. “I’ve got so many things to focus on that I’m less concerned about the economy. If we fix what we need to fix, I’ll have plenty of opportunities to bring on business.” To do that, Rogers plans to focus on “simple” things. “Providing good consistent service lets you pull a lot of other levers. It’s the only way to get pricing power and volume.”
That’s a lesson Rogers, 49, said he learned as president of Holland, one of YRC Worldwide’s three regional LTL carriers. Rogers became president of Holland in 2008 and is credited with revitalizing the company, the 11th-largest LTL carrier on its own, after it stumbled trying to expand beyond its Midwestern territory.
“Holland was the shining star of USF’s regional network” when YRC Worldwide, then Yellow Roadway, acquired USF in 2005 for $1.3 billion, said Mike Regan, president of TranzAct Technologies, which provides transportation management services to a broad range of shippers.
Some of the gleam rubbed off that star, however, as YRC Worldwide closed Dugan and Bestway and tried to expand Holland. Problems at the regional subsidiaries led to a $638.4 million loss for the entire company in 2007.
Rogers took over Holland in 2008 and oversaw the closure of more than 20 terminals in 2008 and 2009 as the company drew back to its core territories in the Midwest and central Southeast. Holland is now considered the top performer in YRC Worldwide’s regional group, which had a second quarter operating profit of $14.7 million on a 14.3 percent year-over-year increase in revenue, to $401.7 million.
“Holland is a very significant player in the upper Midwest area,” Regan said. “That’s a testament to Rogers’ leadership style and abilities. That bodes well for YRC.”
At Holland, Rogers said he focused “on getting Holland back to being the company everybody had known. We had to focus on the right things, and focus on fewer things, not trying to be everything to everybody,” a challenge he brings to YRC.
YRC underwent gut-wrenching changes in recent years as YRC Worldwide merged iconic trucking brands Yellow Transportation and Roadway, eliminating the equivalent of a large LTL carrier in terms of terminals and employees.
At the end of 2005, Yellow and Roadway had 684 terminals combined. Today, YRC has fewer than 300 terminals, and it may shed more. Asked whether the YRC network is now the right size, Rogers said, “I don’t have an answer yet. I think we may still have too much infrastructure, too much network, for the bills we’re handling, but I don’t know. We’ll probably make some decisions in the next month or two.
“The successful approach we took at Holland can work here,” Rogers said. “I’m more confident today than I was when I took the job about our ability to turn this ship around and get back to making money. It’s just going to take some time.”