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eral fuels (18.4 cents on gasoline, 23.4
cents on diesel), which is unchanged
since 1993.
“Let’s maintain and repair our spectacular
interstate system and eliminate
the many bottlenecks that greatly
reduce the utility of our vital highway
network,” Larkin said. “Without a
healthy highway-based transportation
network, we can forget about global
competitiveness.”
Randy Mullett, senior vice president
of government relations for
Con-way Inc., said that it’s time for
trucking to “think big.” He said that
trucking ought to push for its own version
of a “grand bargain” that includes
new safety equipment requirements
in exchange for increased trucking
productivity. “There is a parallel that
is actually in place on the aviation
side,” said Mullett, “and trucking
ought to try the same.”
Mullett added that the trucking
industry needs to press for a longterm,
viable solution to the Highway
Trust Fund crisis, either through
new, and perhaps different, revenue
sources or a fundamental rethinking
of the federal role.
Lane Kidd, president of Arkansas
Trucking Associations, said that the
industry should be encouraged by the
Federal Motor Carrier Safety Administration’s
commitment to safe operations
of heavy trucks. Industry-backed
initiatives such as establishment of
a national drug and alcohol clearing
house and electronic on-board recorders
will likely occur in a second Obama
administration.
“We will see full implementation of
those initiatives within the next two
years,” said Kidd. “Had the election
turned out differently, who knows what
would have happened?”
But Kidd agreed that the nation’s
most pressing transport need is finding
a way to pay for badly needed improvements
in infrastructure. And that could
include what has become a dirty word
in Washington—taxes.
“People need to get beyond that word
in terms of how we finance infrastructure,”
Kidd added. “Fuel taxes are the
purest form to help pay for infrastructure—the
income is segregated for that
purpose.”
LTL
Financial outlook for YRC improves
in third quarter earnings results
OVERLAND PARK, Kan.—YRC
Worldwide’s path to profitability has
been paved with a re-emphasis on lessthan-truckload
(LTL) freight, which
for more than 80 years has been the
company’s backbone. The result is
that financially ailing YRC Worldwide,
which has lost in excess of $2.6 billion
in the last five years, looks a lot less
financially ailing today.
YRC posted sharply improved
third quarter operating results in the
15th month under new CEO James
L. Welch, reporting that it eked out a
$3 million net profit in the quarter on
$1.24 billion revenue. Perhaps more
impressively, YRC Worldwide reported
an operating profit of $27.3 million on
top of a $15.5 million operating profit
in the second quarter. This news marks
the first time in four years that YRC,
the second-largest LTL carrier behind
FedEx Freight, has posted two straight
quarters of operating profit.
“While encouraged by improving
results, I am far from satisfied,” said
Welch, a 29-year veteran of previous
YRC companies. Welch reiterated the
company’s renewed emphasis on LTL
freight, a sharp departure from the
vision of the departed CEO, Bill Zollars,
who strayed into such areas as
foreign operations in China and thirdparty
logistics.
Along with James Rogers, its new
president of YRC Freight, the company
is undertaking a laser-like focus on
profitability in the LTL sector. “Freight
is not a dirty word,” Rogers said. “It’s
what we do—and it’s what we do best.”
According to YRC, shippers should
begin to notice that the company is
offering more direct-load shipments
and has created more efficiency within
the YRC network. “We have realigned
our sales team with a new costing
model to help us understand pricing
in more granularity than we ever have
before,” Welch said. While that has
improved YRC’s freight mix, it has also
led to a slight decline in third-quarter
tonnage as the company sheds unprofitable
business.
“Changing the mix is hard work,
but we are in a position to grow,” said
Welch. “Long-haul, expedited LTL is
what we do best. But our network is
still not where we want it to be.”
Welch is under no illusions. He
added that the next few quarters will be
challenging, while the effects of super
storm Sandy will affect fourth quarter
profitability—plus, the overall U.S.
economy is not exactly booming.
Welch, long known by industry
insiders as a straight shooter, reiterated
in a conference call with analysts that
his long-term vision for YRC remains
built on improving profitability in LTL
freight. “For those of you who know
me, credibility is very important to me,”
Welch said. “While we remain focused
on the turnaround, we have eliminated
most of the remnants of a prior broken
strategy. We are moving toward sales
and operational execution.”
Such “blocking and tackling” has
brought dividends. Though the $3 million
net gain was relatively small, it was
far better than its $122.3 million net
loss in the year-ago third quarter.
“We’re confident we have stripped
away many of the distractions we had
when we took over,” Welch added.
The new YRC management team has
reason to be somewhat pleased, if not
proud of the turnaround they’re engineering
at both long-haul YRC Freight
and its three regional subsidiaries—
Holland, New Penn, and Reddaway—
December 2012 | WWW.LOGISTICSMGMT.COM LOGISTICS MANAGEMENT 11