Trucking Freight

YRC Worldwide Inc. announced today that it has reached a tentative agreement with the International Brotherhood of Teamsters leadership to modify the terms of the current labor agreement for its employees covered by the National Master Freight Agreement. The proposed changes are designed to reduce the company’s cost structure and preserve operating capital.

Details surrounding the tentative agreement are expected to be available next week following further discussions with labor leadership. The modified agreement will be voted on by YRC Worldwide employees who are represented by the IBT.

Certain statements in this news release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (each a “forward-looking statement”). Forward-looking statements include those preceded by, followed by or include the word “would” or similar expressions. The company’s actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including (among others) whether the employees covered by the National Master Freight Agreement ratify the modification to that agreement, inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture cost reductions, including (without limitation) those cost reduction opportunities arising from the combination of the sales, operations and networks of Yellow Transportation and Roadway, changes in equity and debt markets, a downturn in general or regional economic activity, effects of a terrorist attack, labor relations, including (without limitation), the impact of work rules, work stoppages, strikes or other disruptions, any obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction, and the risk factors that are from time to time included in the company’s reports filed with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K for the year ended December 31, 2008.

YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Freight and Roadway Trucking, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 49,000 people.

YRC Worldwide Inc. announced that it has earned a Kaizen Challenge Award for continuous improvement from Toyota North American Parts Organization for the 2nd consecutive year. Toyota NAPO announced the 2008 award winners during its annual logistics provider meeting.

Kaizen, which means continuous improvement in Japanese, is an integral component of the Toyota Production System. To encourage its suppliers to embrace the same standards, Toyota created the Kaizen Challenge Award. All preferred suppliers are considered for the award. The award recipients are the suppliers that most effectively used Kaizen principles in helping Toyota address its supply-chain challenges.

About 20 preferred suppliers participated in the 2008 Kaizen Challenge and YRC Worldwide was one of 3 award recipients in its class.

Over the last several years, YRC Worldwide has established a strong partnership with Toyota NAPO, and more than 130 YRC Worldwide employees have completed training in the TPS and Kaizen.

The 2008 Kaizen Challenge award recognizes YRC Worldwide for developing a plan to improve delivery efficiency for over-sized and heavy parts such as truck beds, truck frames, drive trains, transmissions and engines from parts distribution centers and vendors to Toyota dealers throughout the country.

Plan elements included nationwide implementation of a standard process for equipment placement and material handling and a customer service process to coordinate delivery service with dealers. As a result of this process, damage claims and injuries were virtually eliminated.

“YRC Worldwide has been an outstanding partner over an extended period and has made a strong commitment to learn our business and our processes for continuous improvement,” said Sylvia Duran, National Logistics Manager at Toyota NAPO. “For both companies there is no best . . . only better.”

“The employees of YRC Worldwide are gratified to receive this prestigious recognition from Toyota,” said Greg Reid, Executive Vice President and Chief Marketing Officer for YRC Worldwide. “Not only does it demonstrate our ability to deliver innovative, cost-effective solutions, it is a great vote of confidence from a valued client. We’re honored and dedicated to continue to exceed the expectations of Toyota in the future.”

YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Freight and Roadway Express, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 49,000 people.

Damage-free reliability creates satisfied customer. We mainly ship outdoor kitchens, which in most customers’ eyes are stainless steel grills. Our products go to customers in Canada and the United States . . . East Coast and West Coast.

Before YRC, we were working with another LTL provider, and we had problems. Product wasn’t secured on the truck and when the customer received the order, it was damaged.

Our Roadway Express account rep at that time, came by one day when this happened. He asked that if he could ensure our product would get from my location to the destination safely, would I give him a shot? I said, “Make it happen and let’s do it.”

Our first Roadway shipment got there on time and in one piece. No complaints! That was three years ago. Since that time, Roadway and Yellow Freight are and now YRC has been simply reliable. Everything comes through as promised.

About five years ago, the president and owner of our organization wanted to attract more customers. We developed a hybrid water heater that we’ve been selling for about two years. Our water heater keeps the water hot no matter what time of day it is; you don’t waste water and money running cold water out of the lines. You can have two showers going at one time and your washing machine and dishwasher, and you’ll still have water pressure and hot water. It’s also highly efficient; it not only saves energy but it burns clean.

Now, more than ever, we’re placing our confidence in the heavyweight expertise of YRC. Customers want greener appliances, so our business is up . . . and our pallets are heavy . . . about 1,600 pounds apiece.

Before, we would ship 15 to 20 pallets per week. Now, even though the housing market is down, our sales are growing and we’re averaging between 24 and 40 pallets a week.

We’re happy. We have great products and YRC is making sure they arrive in good shape.

OVERLAND PARK, Kan., June 18 /PRNewswire-FirstCall/ — YRC Worldwide Inc. (Nasdaq: YRCW) today clarified that the amendment it finalized on June 17, 2009 to its revolving credit facility with its lenders has the same terms in regards to total liquidity and capacity under the facility that existed prior to yesterday’s amendment. The new amendment does give the company immediate access to the escrow funds of $73 million by means of revolver capacity that can be borrowed at any time without approval from the lenders so long as the company’s cash is below $150 million. The $150 million is a new maximum of cash and cash equivalents that was mutually agreed to by the company and the lender group and set well above the company’s average daily cash usage. The company’s total liquidity includes its cash balance in addition to the availability under its credit facilities, which in total was $242 million at May 31, 2009.

“Yesterday’s amendment reflects the continued support of our lender group as we further implement our strategic actions both operationally and financially,” said Tim Wicks, Executive Vice President and CFO of YRC Worldwide. “We now have immediate access to the escrow funds, which is a month before the original agreement, and there is not an immediate reduction to our capacity.”

The company did not pay any fees to the lender group associated with this amendment.

YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Transportation and Roadway, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide< employs approximately 49,000 people.

Data concerning the availability of land, industrial land use patterns, and the rules and regulations governing the development of land uses in the future are critical inputs that are used by the economic and land use component of the model to generate socioeconomic forecasts. Some key issues with respect to land use data that are important to consider as inputs to the model include an understanding of industry location choice decisions as a function of freight carrier transportation system performance, as well as a better representation of the inter-dependencies between land use and economic activity. An example is how increased economic activity in one industry sector may fuel the development of land uses associated with other industry sectors and vice versa. This tendency can be the location of automobile parts and accessory firms near automobile assembly plants and is often called clustering of industries.
Freight trucking companies models for use in transportation network information is a key input for economic activity models in order to assign the freight flows by mode to each modal transportation network. The network is represented in terms of links and nodes that provide connectivity between zones. Following are some key network attributes to consider in the model: capacity, size and weight regulations, hazardous material regulations, road closures and road speed limits.

The key feature of economic activity models is the integrated modeling of the dynamic interactions between economic activity, land use, and truck freight rates. The feedback of model results to the economic/land use model accounts for any changes in economic activity and/or land use that would result from future variations in transportation system performance. These changes in economic activity and land-use patterns in turn impact the magnitude and distribution of ltl truck freight flows on the transportation network and associated transportation system performance. Due to the considerations of these dynamic interdependencies between transportation system performance, economic activity, and land use, economic activity models also offer capabilities to accurately model induced freight demand impacts of new transportation or industrial investments.

The interrelationships between economic activity and land use are important to understand, particularly in developing freight shipping company forecasts, since land use defines the spatial distribution of economic activity, and economic activity has a significant impact on the location and types of land uses in a region. For example, increased port economic activity may impact the development of new warehousing/distribution center land use and their location patterns. In addition, new land uses and development also can help economic activity in a region, which underscores the importance of integrating land use forecasts with predicting economic activity and associated shipping freight demand. For example, the development of a new intermodal terminal in a region can instigate the development of logistics parks and warehouse/distribution centers, resulting in increased economic activity and associated demand for freight transportation.

For this model, the socioeconomic data available are stratified into the following 10 industry groups: 1) agriculture/farm/fishing, 2) mining, 3) construction, 4) manufacturing – products, 5) manufacturing – equipment, 6) transportation, 7) wholesale, 8) retail, 9) finance, and 10) education/government. The availability and use of multiple industry groups increases the accuracy for truck travel generation because each industry group can have a different freight shipping rate.

Trip distribution was performed using a standard gravity model. Model calibration was performed using a reasonableness check of the average truck trip lengths estimated by the model.

The truck model is designed to generate truck volumes based on average daily traffic. The truck model output reports truck volumes based on truck classes are medium-heavy duty and heavy-heavy duty for regulatory purposes.  A multi-class equilibrium assignment was performed and validated by comparing model truck volume outputs to observed truck counts collected.

Some of the issues in the San Joaquin Valley truck model that are being addressed in the ongoing model update include:

There were no calibration procedures adopted to validate the ITMS commodity flows to observed shipping companies truck counts.
Flows of nonmanufactured commodities (especially farm and mining products), flows between major city pairs (e.g., flows between the urbanized portions of Southern California and the San Francisco Bay Area), and flows disaggregated to the zip code level need more careful scrutiny and adjustment using a variety of other sources.

The secondary truck trip tables were developed using rates that were found to be too high and needed to be scaled back during calibration.

The discounted freight shipping rates for the internal truck model were developed from two primary sources of existing truck models. The data was selected because it provided freight truck discounts rates based on national averages. The Vancouver rates were selected to provide stratifications of rates for more employment categories. The data was used to derive rates for light trucks, while both the aforementioned sources provided rates for medium and heavy trucks, although the data defines these categories as six or more tire trucks and combination trucks, respectively. These rates were originally developed using the two primary sources of data, but were adjusted during model calibration.

Freight truck models develop highway freight truck rates by assigning an O?D table of freight truck flows to a highway network. The O?D truck table is produced by applying truck trip generation and distribution steps to existing and forecast employment and/or other variables of economic activity for analysis zones. This method involves estimating the O?D table directly using trip generation rates/equations and trip distribution models at the TAZ level. This is similar to the four-step passenger models. The mode choice step is eliminated since shipping freight truck trips are estimated directly without consideration of other possible modes for moving freight. The components required for this modeling technique include existing and forecast zonal employment data, methods to generate zonal freight productions and attractions by using freight truck trip generation rates, methods to generate truck O?D flows by applying trip distribution procedures to truck productions and attractions, and methods to assign the O?D freight truck flows to a highway network.

Freight truck models usually attempt to account for shipment of goods, including local delivery. Because these models are focused exclusively on the truck mode, they cannot analyze shifts between modes. Truck models are usually part of a comprehensive model that forecasts both passenger and freight movement and, consequently will often use a simultaneous assignment of truck trips with automobile trips.