(Editor’s note: an earlier version of this story featured the names of the individuals on the panel. After discussion with Wolfe Research, we are making the discussants’ identities anonymous.)
In a broad-based discussion about the state of the trucking market with a panel of shippers, the talk got very specific when the panel’s moderator asked about one particular carrier – YRCW.
At the Wolfe Research Global Transportation & Industrials conference, analyst and moderator Scott Group asked the virtual gathering about whether the large shippers he had brought together might be impacted by the ongoing financial troubles at the less-than-truckload (LTL) carrier.
Specifically, he turned to one shipping manager who does a great deal of business with YRCW.
“All four of their divisions are big within our network,” the shipping manager said, an apparent reference to not just YRC Freight but also to USF Holland, New Penn Motor Express and USF Reddaway. “We are staying close and monitoring their status. They’ve been a big partner for us as long as I’ve been in the business,” a period he said was about 10 years.
The shipping executive had said earlier on the panel that his company was going through a bid process now for future freight needs and that YRCW was a part of the exercise.
He added that his firm has “no immediate plans” to reduce its activities with YRCW, “but we are making sure we have a contingency plan or two in place for the worst case scenario.”
“We’ve been there with YRC from the get-go and our plan is to stick with them in challenging times,” he said.
But less optimistic was another shipper that is near a bid round for LTL services, and YRCW “has been talking with us over the past year and we’ll see what comes from that.”
But he was blunt. “Given the risk involved, it is unlikely we would bring them in as a carrier,” he said. “But we will see.”
The irony of the discussion of YRCW is that in another part of the panel, the shipper representatives talked about the discipline that LTL carriers were exhibiting in their pricing as compared to their truckload carriers. One manager said his firm puts out a bid to LTL carriers every two years and it will be launching its next round in a month. “I think the carriers are more disciplined,” he said of the LTL companies that will bid for his company’s business. “There aren’t as many. “
He expected the process for securing new rates to produce numbers that would be “relatively flattish.” He also said his company “might” put a mid-year review in place, because of the extreme nature of recent changes.
“We have to keep in mind that those rates have to be sustained for two years,” he said.
Another manager said its biennial LTL bid round was delayed to June from April this year. He said the company is expecting low single digit increases.
All of the shipping company representatives reported strong surges in demand for their products at the start of the crisis, with demand tailing off to various degrees since then. But they also were consistent on another observation – they hadn’t changed modes of transportation.
One manager appeared to be the heaviest user of intermodal services on the panel. He said that transit times had improved for both trucks and for intermodal. He noted the “pretty significant downturn” in spot trucking rates, but “we’re not going to be doing modal shifts just based on price.”
There’s plenty of capacity in the truckload sector. One manager said that over the last six weeks, his company has gotten “upward of” 97% acceptance on its loads. “I’m getting no indications that it’s going to get worse for at least the next quarter,” he added.
Another manager topped that – he said most acceptance rates have been in the 99% range.
“When we go to the secondary market, loads get covered almost immediately,” he said.
Group asked about the use of third-party logistics providers (3PLs) by the shippers, and the answers varied widely. One said about 90% of its shipments were using asset-based carriers; Another said his firm was “always” asset-based, though conceded there was some use of brokers who “act like asset carriers,” with drop trailer service. A third put the use of 3PLs as carriers at 5%.
The asset-based user said even with dropping spot rates, his company is not changing its approach toward who carries its freight – mostly asset-based carriers. “We’re going to stay true to who we are,” he said.
He conceded that might mean that his company would be “leaving money on the table,” but that it was “comfortable” with its decision. He said there were four truckload carriers that did the bulk of his business. He did not identify them but said the company would be staying with them “through the good, the bad and the ugly.”
But another manager said his company is approaching 25-30% use of 3PLs to move its freight. “Some of it is for cost reasons but we have seen excellent service from our broker partners,” he said. He added that use of brokers at his company tends to focus on three unidentified companies.
Joe smuckatelly
Corporation style to drive down freight prices looks like yrc is in a tight spot no better time to look at saia ltl for all your needs no corrupt union and all the under table schemes
Jimmy Lemon
FreightWaves is a media outlet and like all media outlets these days all of them have an agenda. Sometimes that agenda is obvious and sometimes that agenda is not quite as obvious. Insofar as media outlet agendas are concerned, it’s really not that important what their respective agenda is. What is important that you as a reader know what their respective agenda is. Then you as a reader can discern what is fact an what is opinion….
Art
FW agenda is make money on advertising and sponsors.
Most of the articles are sponsor brainwashing.
The site quality has gone down the drain.
Art #2
FW would make articles defending TQL for the right price.
They’d back any horse that smiles at them.
Joe
Freight waves has their favorite trucking companies YRC is not one of them. They trash this company any chance they get somebody at freight waves hates yrc maybe an ex-employee Freight waves is becoming more and more irrelevant. There is a pandemic going on around the world everybody is going through this. Try a little positivity for once!! why would anybody want to see a company go belly up!!?!?! Everyone should start trashing freight waves every chance they get the site is garbage anyway nothing useful comes from this site.
Monica Aguilar
Greed should not be the driving issue during this dreadful future that we ALL face, including you all on the board. This should be a time of comming together and helping each other in America. Keep Amerian jobs with Americans who are already well trained and certified. Taking Union jobs away from American workers for substandard, incompetent and cheap quality work is WRONG…….and we all know that that way of thinking WILL lead to your company’s demise AND OUR COUNTRY’S GREEDY DESTRUCTION!!!
My father was a Roadway truck driver who devoted 40 yrs of his life to his job. His job put food on our table, paid for our home and put his children through College…..please continue to afford the same opportunities to responsible and qualified truckers like my father. Isn’t this what America was based upon……THE AMERICAN DREAM? Please don’t help in America’s DESTRUCTION. DO THE RIGHT THING…HELP THE HUMBLE, HARDWORKING AMERICANS…KEEP YRC ROLLING!
Vitamin B complex and full coffee thermos driver
I delivered at NEMF , north side of Providence road island in 2014 a few days before Christmas a load of old navy Fishkill NY . When I was a Barr Nunn before the original owner died. ANYWAY that terminal was full of Mexicans and Muslim foreign black people that didn’t speak English very much except for the office . The black Muslims talked about killing the people up stairs . I had 2 different bills for the same trailer and MR Hudson the office manager signed my bills. A security guard watched me dressed in a while long sleeve collar dress shirt with a brown leather belt over each shoulder that made a X in the middle of his chest. With black dress pants on.
QEW 401 EH! eH! Flying J
A Duie Pyle and Ward trucking seem to be LTL winner’s
Chuck Norris
I agree with f**k you. FREIGHT WAVES = BOTTOM OF THE BARREL WRITER’S let’s see how long they post this news for and time stamp it like it’s breaking news.
Fuckyou
Post some real news about yrcw you pos its always negative news freight waves sucks everything is regurgitated for weeks at a time wish your shit site would stop popping up on my Google news feed.
Phil
He does have a point! I haven’t seen any that were positive.
Chad Hildebrand
Yrcw will be there in the end we been trucking for 100yrs like it or not we will be around cause the people who actually do the solid work have been doing in for generations… You may get cheaper rates with other carriers but with that rate cause less then quality service like it or not experience beats price everytime out that cheaper service gets you torn up freight and crazy claims so either pay for a service or pay for a dollar store product when it finally arrives.. we move the world from coast to coast so like it or not we are YRCW….
Art
FW has slacked off big time since March.
What are you folks doing “working” from home?
LOL
If unemployment wasnt 40 million probably no articles would be written.