Perspicuous Risk

YRC Worldwide narrowed its losses last year and in the fourth quarter, but fierce competition and insecurity over its debt-for-equity swap hurt its business, company officials said today. Shipments and tonnage at YRC Worldwide companies declined both year over year and from the previous quarter in the last quarter of 2009.

But YRC officials said shipping trends are already improving in 2010 and that 1,000 shippers had either returned business or booked new business since October.

“We’re seeing the beginning of a pretty aggressive move back to the company by customers that had diverted some or all of their shipments,” said Chairman and CEO William D. Zollars. He told investment analysts today that YRC is in “advanced discussions with investors,” but declined to comment on those discussions.

For the full year, YRC Worldwide reported an $899 million loss before taxes, compared with a $1.1 billion operating loss and $974.4 million net loss in 2008.

Its operating revenue plunged 41 percent in 2009 to $5.3 billion, compared with $8.9 billion in 2008 and a high of $9.9 billion in 2006.

The company did not report an after-tax net loss for the fourth quarter or year, claiming “numerous complexities to the tax valuation” of its debt-for-equity exchange, completed Dec. 30. Shareholders will vote on that exchange Feb. 17.

YRC’s carriers saw freight levels drop as many of their less-than-truckload competitors aggressively priced services to build volume in the fourth quarter.

At nationwide LTL carrier YRC, total tonnage dropped 42.8 percent from the year-ago fourth quarter. Compared with the third quarter, total tonnage was down 14.1 percent and tonnage per day was down 10.6 percent at YRC National.

The carrier’s total number of shipments and shipments per day fell 39.9 percent from a year ago, with shipments declining 14.2 percent and shipments per day 10.7 percent from the third quarter.

Despite those declines, YRC did manage to improve its yield slightly compared with the third quarter, increasing revenue per hundredweight 1.5 percent. “We’re just not chasing bad business,” Zollars said.

Year-over-year, revenue per hundredweight at YRC was down 4.2 percent.

YRC Worldwide’s regional LTL carriers also saw tonnage and shipments drop in the fourth quarter. Total tonnage dropped 24.7 percent from a year ago at YRC Regional Transportation, while tonnage per day decreased 19.6 percent.

Compared with the third quarter, total regional tonnage dropped 12.8 percent and daily tonnage 6.2 percent.

Total shipments at the regional group — which includes Holland, Reddaway and New Penn — fell 24.9 percent to 2.8 million in the quarter, while shipments per day were down 19.9 percent from a year ago. Compared with the third quarter, total shipments fell 14.6 percent, and daily shipments 8.2 percent.
The regional carriers’ revenue per hundredweight was down 7.7 percent year-over-year and 1.8 percent from the third quarter.

Contact William B. Cassidy at wcassidy@joc.com