National less-than-truckload (LTL) carrier YRC Freight is charting a new route by creating a regional network in a state where parent company YRC Worldwide has never had regional coverage.
As part of a broad, ongoing reorganization at YRCW, YRC Freight is expanding a regional next-day service in Texas, adding facilities in Fort Worth and Garland to an existing eight-terminal network.
The 10 Texas terminals now form a hub-and-spoke network within YRC Freight’s larger network, with San Antonio serving as the hub or “velocity center.” The other spokes in the network are Dallas, Houston, Austin, Corpus Christi, McAllen, Laredo, and Eagle Pass.
The next-day network gives YRC Worldwide a more localized presence in the Lone Star State, a large market and one not served by YRC’s stand-alone regional LTL subsidiaries, Holland, New Penn, and Reddaway. Those companies are active in the Midwest, Northeast, and West.
YRC Worldwide launched the next-day service in Texas last October, at about the same time it began trimming its national terminal network, closing 64 terminals and consolidating regional and national operations at another 25 facilities. YRC Worldwide had $4.9 billion in revenue last year but reported a net loss of $104 million, spurring its efforts to reorganize.
YRC Freight, traditionally a two- to five-day LTL carrier, struggled in past attempts to offer regional service, and dismantled what it called its “velocity network” in 2012, leaving the regional market to its sister companies. But the reach of those companies never extended to Texas, creating an opportunity during the reorganization.
In Texas, turning the San Antonio distribution center into a velocity center was key to the regional service plan, T.J. O’Connor, president and COO of YRC Worldwide, said in an interview last November. In effect, that created a nested next-day network inside the national network.
“Where we don’t have a regional carrier, the velocity center gives us the ability to provide first- and second-day service,” O’Connor said. “With e-commerce, the regional is growing faster than the long-haul sector.” And Texas is too big a state and regional LTL market to ignore.
“As regional networks get more sophisticated, customers will demand we find ways to do move freight faster, cheaper, while providing them with more information,” said O’Connor, who was president of Reddaway before being named president of YRC Freight in 2018.
The regional business brings with it “an extreme sense of urgency,” he said. “From dockworkers to linehaul drivers, everyone knows the majority of freight picked up today is delivered tomorrow. I’m excited about seeing that sense of urgency transferred into the long-haul network.”