Darren Hawkins, CEO of Yellow Corp., which controls about 10% of the $50 billion LTL market, said recently he is “very pleased” with his company’s transformation from a national carrier with three separate regional trucking companies and a logistics arm into a unified “super regional” carrier with integrated services across the country.
“It’s important for LTLs to expand service products,” Hawkins told LM. “We’ve been competing very strongly in regional markets. But we’ve been listening to customers. They have spoken. The result is our super regional offering with a national footprint and great regional service. We want to grow profitably—slowly, profitably and well-paced. Freight is moving through the network at fair prices. Growth will come as we add drivers and complete our transformation. Yellow doesn’t have to buy or build any terminals. As we add human capital, we will grow.”
And he believes 93-year-old Yellow will re-establish itself as one of the elite carriers in the country. Yellow got into financial difficulty following its $1 billion purchase of Roadway Express in a merger of giants in 2003 under then-CEO William Zollars.
“When you think of the top carriers, it’s about safety and service,” Hawkins said. “That was the case 30 years ago and it’s the case today.”
Most of the work of integrating into a super regional carrier with 316 terminals and 32,000 mostly Teamsters-covered employees has been accomplished under Hawkins, Yellow’s CEO since 2018.
Like most LTL carriers, Yellow has enjoyed great jumps in profitability this year. In January, its revenue per hundredweight rose 23.1%. In February, the year-over-year growth in revenue per hundredweight was an astounding 33.8% percent.
“Financial results for the first two months of the quarter are improved compared to a year ago even though terminal operations were impacted from Covid-19 cases and weather during January and February,” Hawkins said.
“February’s tonnage decline was primarily impacted by limited terminal operations in select markets that lasted a few days attributable to these events,” he added. “All Yellow operations are fully reinstated while demand for LTL service remains high and we continue to execute our strategy to improve profitability of the freight moving through our network.”
“We are nearing completion of the design and modeling phase of the linehaul network integration to support both regional and long-haul service as well as streamline local pickup and delivery to eliminate duplication. When completed we will operate a fully integrated network with the speed, efficiency and consistency of a super-regional carrier,” concluded Hawkins.
Prior to the transformation, Yellow Freight was its national long-haul option, doing $2.9 billion in revenue in 2020. New Penn in the Northeast, Holland in Central States and Reddaway in the West were regional LTL options. And something called HNRY was its national brokerage arm.
But since 2020, Yellow has been diligently working to integrate those divisions into something called “One Yellow” with 14,200 tractors and 42,000 employees. To do that, Yellow already has:
- Simplified its sales team to provide shippers a single point of contact for all brands;
- Realigned operational leadership and reporting structure to create new efficiencies and operational areas to support the network;
- Formally changed the holding company from YRC Worldwide to Yellow Corporation in anticipation of a company-wide rebrand to Yellow “one technology platform”;
- Transitioned operating companies to that one technology platform; and
- Integrated to one network, creating a common enterprise platform to strengthen asset and network efficiencies while enhancing service in the next-, two- and three-day lanes nationwide
This year, Hawkins said Yellow is poised to go to market as “One Yellow,” a super regional carrier to provide shippers with choice, simplicity and speed.
“We’ve brought four individual companies onto one technology platform,” Hawkins explained. “It’s no longer a multi-year transformation. We’ve done it. Yellow will emerge as a super regional carrier with one web site, one invoice and one network,” he added. “No more dual linehaul networks. All that efficiency frees up capacity. That’s what customers want—access to LTL capacity.”
Hawkins admitted the old format was confusing. With more than 17.2 million shipments adding to $5.1 billion in revenue, Yellow now is the nation’s fifth-largest trucking company, and third-largest LTL concern.
“The most vital aspect is one technology platform,” Hawkins explained. “You can’t be seamless with four different systems. That was a good model 10 years ago. But modernization was crucial. Took long time and a lot of work.
“Bottom line is this: when you’re going to market as one carrier as we’re doing, you have an internal view of the entire network,” he added. “The customer doesn’t want to go with four web sites to track shipments. Now, they can do all that in one platform. Technology was the lynchpin and it was the most complex. I’m glad to have that in my rearview mirror.”
With a $700 million loan from the federal government as part of the coronavirus CARES Act recovery, the government effectively owns nearly 16 million shares of Yellow.
That money allowed Yellow to modernize its fleet. Hawkins said it has purchased about 2,400 new tractors the past 18 months with 450 more coming this year.
The U.S. Treasury loan provided two tranches totaling $700 million in aggregate principal commitments. Tranche A, drawn on Dec. 31, 2020, was for $300 million and covered deferred short-term contractual obligations, deferred obligations including pension and healthcare payments and working capital. Tranche B for $400 million was used for reinvestment in tractors and trailers. It was fully drawn as of July 31, 2021.
Those funds have been a lifeline for Yellow to continue its economic recovery. It still lost $109 million last year. But its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose from $195.6 million in 2020 to $306 million last year.
Yellow’s balance sheet steadily improved last year. While its LTL tonnage declined 3.3%, its revenue per hundredweight rose a whopping 16.4% year over year. Excluding the fuel surcharge, it was up 12.5%.
Hawkins said Yellow’s long-term financial recovery, greatly aided by the loans and a strong LTL rate environment, is on schedule.
“We have industry-leading yield and we outperformed consensus (earnings estimates) in the last three quarters. I am very comfortable where we are.”
Hawkins said the overall LTL environment is positive and should stay that way for the foreseeable future.
“Look at where we are—consumers are good, U.S. manufacturing is rising and inventories are low,” he said. “2022 will be a strong demand year for LTL. We will stick to our pricing philosophy. Growth will come over time. I am absolutely very comfortable where we are in this point in our journey.”
With no major loans due before 2024 and a contract with the Teamsters through 2024, Hawkins added: “We have a good market and we’ve made wise investments. And we have time.”
About the Author
John D. Schulz
John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.
packers and movers bangalore
packers and movers bangalore near me
packers and movers bangalore cost
packers and movers bangalore to hyderabad
packers and movers bangalore price
packers and movers bangalore marathahalli
packers and movers bangalore to chennai
The post Yellow CEO Hawkins predicts ‘great year’ as it transforms into ‘super regional’ carrier first appeared on shrisaimovers.
https://ift.tt/lmrqo0c https://ift.tt/mp8qGJH https://notes.io/UWxn https://ift.tt/d79j5EX https://ift.tt/oO16c2r https://ift.tt/nYVDAiP https://ift.tt/pVBTQqZ https://ift.tt/MtNfaYS https://ift.tt/2Kb69Bh https://ift.tt/GwEVSaI https://ift.tt/H6uN4O8 https://ift.tt/xSivOKa https://ift.tt/HjKfGv0 https://ift.tt/DK0Bc23 https://ift.tt/X2N1o3g https://ift.tt/un5EJN8 https://ift.tt/sNcZFhU https://ift.tt/KebCuGg https://ift.tt/2gbaKsJ https://ift.tt/3tzWSbK https://ift.tt/kSeYfz1 https://ift.tt/n0BU31t https://ift.tt/vFW2H1P https://ift.tt/rh8IF01 https://ift.tt/yBnowTM https://ift.tt/YrqBQkX https://ift.tt/W6koZV3 https://ift.tt/OHyl1np https://ift.tt/JMP1Ds3 https://ift.tt/w3QstW7 https://ift.tt/gYvz73p