Wednesday, May 13, 2009

U.S. Trucker in financial trouble

YRC is the name of the company which resulted from the purchase of Roadway by Yellow Freight. Both of these companies had been two of the largest truckers after deregulation of the trucking industry (which was in the 70's).

As with many things, bigger is not always better.

They did not quickly integrate the two companies, and although I don't know for sure, I suspect they did not make the tough cost cutting moves until it was too late, considering they are now hit with the recession.

I doubt they will survive.

YRC Worldwide warned it may not reach its second quarter earnings requirement as the fragile financial standing at the nation’s largest heavy-freight trucking company seems to be getting shakier.

One Wall Street analyst is not optimistic about YRC’s recovery chances in the thick of a recession.

“We have a difficult time seeing how the math works here to restore the company to profitability,” said David Ross of Stifel Nicolaus. “It has already had its employees take a 10 percent wage cut. Plus, we do not see industry volumes rebounding this year, and industry pricing remains very competitive.”

click here for article from Journal of Commerce

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