William B. Cassidy, Senior Editor | Apr 10, 2012 11:18AM EDT
YRC Freight implemented two changes of operations over the April 7 weekend, reconfiguring its terminal network to speed freight and reduce handling.
The restructuring, approved by the Teamsters union last month, eliminated road domiciles, shifting drivers from end-of-the-line terminals to hubs, the company said.
The less-than-truckload carrier also eliminated its in-house Velocity network, established in 2008 to speed next-day freight, and its utility employee category.
The changes focus YRC Freight on longer haul LTL shipments traveling more than 500 miles, although the company said it would to haul overnight freight.
The network redesign is the latest step by YRC Worldwide’s new leadership to improve the struggling LTL group’s performance and return to profitability.
The redesign is a proactive step for an LTL giant that has spent much of the past five years reacting to deep losses and sidestepping potential bankruptcy.
YRC Freight lost $88.5 million in 2011, compared with $170.3 million in 2010. The nationwide carrier increased operating revenue 11 percent to $3.2 billion.
The restructuring underscores a broad rethinking of strategies at YRC Worldwide, which includes YRC Freight and regional carriers Holland, New Penn and Reddaway.
The restructuring follows an intensive review of YRC Freight’s 282 terminal network by President Jeff Rogers, who joined the LTL carrier last September.
“Right now, we’re handling too much freight too many times,” Rogers said in an interview last year. Reducing handling “will help us in all kinds of areas.”
The changes of operations were proposed to the Teamsters union earlier this year, and approved by the union last month. They were implemented Easter weekend.
“Everything went very well,” Rogers said in an interview Monday. “All the equipment got moved and is in place. Now we’ll see how it works going forward.”
The restructuring also involved moving people, affecting more than 500 jobs, as workers at some terminals were offered work at other locations.
The reorganization is likely to lead to a small net reduction in jobs, depending on how many drivers or workers choose to transfer to new locations.
Road domiciles at 60 terminals were closed, and drivers shifted from end-of-the-line terminals to distribution centers, where they can be better managed, Rogers said.
Dock workers at some terminals were affected as well, and under the proposal, utility drivers were to be offered work as local cartage drivers.
The restructuring puts more emphasis on a streamlined network of corridor hubs, reducing the number of corridor freight-handling hubs from 28 to 23 facilities.
That should eliminate several thousand “handles” a day, Rogers said. “Where we were moving it on three trailers, now maybe we’re moving it on two.”
The company’s goal now, Rogers said, is to increase volume and improve its freight mix, which he hopes will lead to higher revenue and profitability.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc.
