Thursday, August 6, 2009

A note to Tyna with SAIA, mostly about the YRC Worldwide discount

One of our sales reps sent me a link to this WSJ article today:

As YRC Struggles, Rivals Stalk Clients
YRC Worldwide Inc., one of the nation's biggest trucking companies, has been struggling in recent months as the recession has sapped demand for freight services. Now, in an industry known for its hardball tactics, YRC's competitors are piling on, trying to pick off its clients by telling them the company's weakness could put their shipments at risk.

The competitors are indeed piling on. I have to kick sales reps off the steps just to get in the office each morning.

YRC is the largest player in so-called less-than-truckload shipping, in which goods from several customers are consolidated on trucks and delivered through a nationwide series of distribution centers. The company, which operates the Yellow and Roadway trucking lines, has a 20% share of ...

And that's where the WSJ "preview" of the article ends, except for paid WSJ subscribers. Unless, of course, you have sense enough to use an internet search engine. You plug all of that last sentence into Google, and you can find where an outfit called Cargonews Asia has already scraped it (without attribution). Here's some more:

....has a 20% share of the $51 billion-a-year business. Though it says it can weather the economic storm, YRC's financial situation has become increasingly dire, amid losses stemming in part from what analysts say are underperforming acquisitions and problems integrating its national route networks. Last week it reported a 35 percent drop in second-quarter freight tonnage, a steeper decline than those of many rivals.

YRC's competitors can smell blood in the water. This is a huge opportunity for them. They take me to lunch, and at some point they give me the look that Baptist preachers used to have when they asked "If you were to die today, where would you spend eternity?" But instead, they ask "What are you going to do if YRC goes under?" "Are you going to have a lot of freight stuck on their docks?" "How have YRC's service levels been?"

Roadway had little or no debt when Yellow Freight bought them out a few years ago. Both were (and still are) union companies. The problems with integrating their national networks aren't an exaggeration, and neither are the issues with underperforming acquisitions. (Do a bit o'Googling on USF Bestway.) I haven't even mentioned the Teamsters Union, have I ?

If YRC goes under, that will leave ABF as the only union LTL carrier. I never thought I would see this day. (Do another bit o'Googling, and you'll also see that their competitors aren't shy about advertising that they have non-union drivers. I wonder why.) Despite my anti-union bias, I hope YRC can find a way to survive.

Here's some other stuff from further down the article:

SAIA, of Johns Creek, Georgia, sent some YRC customers a letter offering prices "equal to a 12 percent discount off the current pricing the [customer] currently has in place with any carrier" in the YRC group. A Saia official said the company wasn't necessarily singling out YRC customers and also offers rate cuts to customers of other competitors.

Note to Tyna with SAIA.....I haven't gotten that letter yet, and I'm looking forward to getting one. We need to talk. If ANYBODY gets another 12%, WE get another 12%.

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