YRC announced a proposed change of operations to restructure its network that effectively will remove them from servicing next day points via normal ground service.  YRC stated they wanted to be the premier carrier servicing shipments in the 2-5 day markets of 500-2,500 miles.

 Over the past years, YRC had strived to enter into the regional markets to become a carrier offering both regional next day services as well as traditional longer lengths of haul.  The original goal was to capture as much of a customer’s freight as possible within one company.  Now, they are shifting that strategy and reverting to a network that will solely focus and support shipments moving greater than 500 miles.

 In conjunction with this change, YRC is proposing to transition from 28 hubs to 23 and convert the others as stand-alone end-of-line terminals.  Since YRC is a unionized carrier and governed by contracts signed with the Teamsters, a formal change of operations must be approved by the Teamsters. 

 In their filing with the Teamsters, approximately 700 hourly employees would be affected, resulting in the opportunity for such employees to relocate and follow work.  With such a change, YRC will gain some employee efficiency and eliminate multiple hourly  and management personnel. 

 It is anticipated that this change of operations will cost in excess of $2 million.  Naturally, YRC believes that the efficiencies gains will more than cover the one-time cost.

 This is a definite sign by YRC that it is returning to its roots… that of a long haul carrier.  While many LTL carriers continue to escalate the number of services offered (warehousing, international, expedited, household relocations), YRC is serving notice that they intend to focus on what it does best.  They are correct when they say they have regional carriers within the parent that can adequately service the next day market.  However, Reddaway, Holland and New Penn are constrained by their physical boundaries. Going forward next day movements outside those boundaries will not be offered.

 Given YRC’s cash position and recent profitability (or lack thereof), this strategy shift makes sense.  As they continue to fight for survival focusing on their core competencies may just be a good move. I guess only time will tell.