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Speeding Up Yellow and Roadway Integration

To combat a continuing challenged less-than-truckload (LTL) environment, YRC Worldwide looks to network consolidation as a major step to turn around its fortunes.

Since the official acquisition of Roadway by Yellow Transportation on December 11, 2003, YRC Worldwide Inc., the holding company, claims to have reduced duplicate back office functions, shared technology applications, to have formed common management teams and combined corporate sales.

Now, although the Yellow Transportation and Roadway brands will remain in the marketplace, local sales teams will be brought together and a comprehensive portfolio of services will be offered through one operating network. The company’s hope, and herein is the risk, is that by operating one national network it will be able to significantly increase network density that will translate into lower fixed costs and enhanced service performance for the shipping community.

These changes will take place in phases with the aim of continuing customer service and to provide a seamless transition to employees. Integration will continue through 2009 with the aim of improving operating income by $200 million or more, according to management.

Bill Zollars, YRC Worldwide chairman, president and CEO, notes, "The economic downturn has created the capacity in our networks needed to effectively integrate our operations, while improving service reliability and speed. By offering a comprehensive service portfolio through one unified network, we can more effectively serve our customers and simplify their experience."

In reflecting on the YRC Worldwide announcement, the International Brotherhood of Teamsters says it will closely review the moves made to combine Yellow and Roadway operations over the next 18 months. Feeling that the moves toward integration may have consequences for the jobs and conditions of its members, Tyson Johnson, Teamster International vice president and National freight director points out that, “There is a process outlined in the National Master Freight Agreement that the union will utilize to ensure that our members are treated fairly throughout what will inevitably be a very difficult process.”

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