Christians and Trucking

The shipper starts with a requirement to ship a piece of cargo. The first decision is whether to pay a premium for next day air freight and hand the consignment over to an integrator, or to use an air freight forwarder. There may also be a third option involving value added services if the company is using a logistics provider (usually one of the larger forwarders). In these cases, the logistics provider would be offering a wider service involving, for example guaranteed air freight, order processing, storage, pick and pack, labeling etc. The logistics company can have a part to play in the manufacturing process by customizing the product subject to orders made and then distributing the goods from the logistics providers warehouse. Increasingly, integrators also offer logistics services Again, the definitions of these companies are somewhat blurred with the larger forwarders describing themselves as logistics providers and indeed managing the entire movement of the shippers goods in some cases, yet offering traditional forwarding services to others. Forwarders and logistics providers may well use the services of an integrator where that is appropriate. The integrators are interested in filling their aircraft and will take forwarders traffic where they are able. Where the shipper wishes to move a small package or documents there are further choices of international couriers or mail.

There are various ways of categorizing the goods requiring movement by air whether by weight or by the need for transportation within a defined period of time. For simplicity, we have generally distinguished between general air freight and express air freight. The former will tend to be carried by forwarders and airlines, though by no means always; and the latter by the couriers, express operators and especially the integrators.

Traditionally, general air freight would expect to have a transit time measured in days whereas the express services offer a guaranteed delivery time often measured in hours, typically an overnight transit. The distinction between time-critical and time-definite products blurs with the increasing interest of the integrators in carrying general freight and the forwarders in providing a total logistics solution, including express services. There are also a great many crossovers in relation to the role and function of many of the actors involved in air freight, as will become evident.

Increasingly, the integrators accepted larger consignments and thereby entered the traditional air freight forwarders industry. The air freight market in the UK has developed a concentration around Heathrow because that is where the mass of carrying long-haul bellyhold capacity is offered.

This concentration in and around Heathrow airport, has encouraged forwarders to invest in warehousing and handling facilities at their own consolidation centers. Cargo is collected from all over the UK and trucked to the consolidation center where it is then aggregated by destination into unit loads which attract an advantageous freight rate from the airline, helpful for next day air shipping. The concentration of activity in volume terms at the Heathrow bases enabled the forwarders to negotiate keen rates with the airlines and effectively now allows them to influence the supply of capacity. Many forwarders have branch offices in the regions, however the focus of their business remains centered on the London hubs.

Scheduled airlines are driven by the passenger demand for a given route. It has been advantageous to airlines to see concentration of activities through a principal airport such as Heathrow. This has given them increased flexibility for routing passengers and exploiting economies of scale in handling the volume of passengers through a major terminal. The cargo departments have then to work with the scheduling, turnaround times and size of aircraft on the route without having much influence over the behavior of the airline.

Although the growth of cargo charter airlines was quite rapid from the mid 1970s due to freedom to operate outside bilateral agreements and growing deregulation of freight operations to and from the USA, UK and some other European countries, fuel price increases and economic recession in the mid to late 1970s hit these airlines particularly badly. At the same time, the scheduled airlines began to take cargo more seriously with more flexible and competitive pricing. The latter were able to offer considerably more freight capacity as they introduced wide-bodied passenger aircraft on more and more routes. Added to this was the restriction of charter operations by developing countries aiming to protect the interest of their own national airlines in the freight market.

Probably the most significant revolution in the air freight business in the last 25 years has been the rapid development of the express sector. Express parcel services, were pioneered by Federal Express (FedEx) in the USA. Fedex identified some key product features hitherto unrecognized by the traditional air cargo industry: the requirement for door-to-door and overnight transport, next day air freight,  which was not normal practice in the air freight industry for urgent/important small parcels often documents. Instead of selling on the basis of weight and price, convenience, speed and reliability became the principal product features. The express parcels sector in the USA boomed during the 1980s with courier and express parcels companies following Federal Express example and setting up their own airline operations. By the 1990s an international sector dubbed the integrators had emerged including United Parcel Service, BAX Global and Airborne Express in the USA and DHL and TNT who were stronger in Europe.

Globally air freight grew very rapidly during the 1960s, faster than passenger growth over the same period. This rate of growth slowed considerably in the early 1980s though it was still around 9% per annum. The early dominance of the European and North American airlines in the carriage of international freight up to the mid 1970s has since been eroded by the rapid development of the East Asian and Pacific region airlines. Recent IATA statistics covering their members shows Korean Air Lines, Singapore Airlines, Cathay Pacific and Japan Airlines are all in the top 10 of the top 50 IATA freight airlines in 1998.  Before the 1960s, air freight was considered as a way of filling up spare capacity on what were essentially narrow bodied passenger aircraft. However the high rate of growth in the 1960s coupled to wider bodied passenger aircraft provided the opportunity for many airlines to recognize the income value of air cargo and in the case of routes which developed cargo volumes greater than might be carried in passenger aircraft, the inducement to introduce scheduled all-cargo services. When introduced on the dense freight routes which could sustain them, they had the effect of stimulating demand. All-cargo aircraft enabled more unit loads and consignments to be carried and the increased use of specialized handling equipment speedup the movement of freight and the turn around of aircraft. All-cargo aircraft were also able to fly at night to schedules which would not be appropriate for passengers. This again led to shorter freight transit times as well as adding considerably more capacity.

Wholesalers buy capacity from airlines and sell this on to small and medium-sized forwarders for expedited shipping. This enables the latter to buy freight space more economically than they might otherwise by contracting directly with the airline. Couriers these services are often provided by express services operators, using the services of passenger airlines and on many occasions courier bags are delivered to airlines across passenger check in desks and carried provisionally by a passenger. Courier parcels are therefore carried on passenger tags and not classified as cargo. The advantage of these services to the shippers or importer is the more rapid transfer of overnight freight at the airport, of origin and destination. At London-Heathrow a purpose built courier reception facility has been built thus avoiding the need for courier bags to be handled across the passenger baggage desks.

When it comes to Christmas merchandise, one nation- wide retail chain’s strategy is to move it off the selves and into the back room fast, so they can stock for our spring promotions. While that helps with our average square foot revenue, it’s like managing a whole other supply chain–in reverse.

That’s why they turn to the team at YRC Reverse Logistics. With YRC, they have control over returns, not an administrative mess.

Their in-store personnel are not experts in transportation. With YRC, they don’t have to be. Their employees simply call the YRC Reverse Logistics 1-800 number where they can ask a client service representative for help creating complete and accurate bills of ladings or arranging for pickups and shipping of the merchandise to the return center.

Their supply chain is designed to move merchandise into stores. With limited space and staffing, Their warehouses are not as effective at managing returns. That’s why Their return center is really a YRC warehouse. It’s separate from the YRC service centers, and designed for reverse logistics. For example, they use its technology to handle return authorizations for credit management.

YRC gives them a better understanding of what they are spending on returns. With their reporting capabilities, they can see where returns are coming from. We can validate the returned items. And they can isolate reverse logistics transportation costs from their regular outbound shipping. Roadway and Yellow Transportation are both part of the YRC network.

Reddaway, a subsidiary of YRC Worldwide Inc. announced today the launch of a new Guaranteed Window Delivery service. With the new service offering, customers can request four levels of window precision to meet their time-specific delivery needs:

    --  Hour-specific delivery precision
        --  Single-hour window - for delivery within any one hour increment
            during normal business hours on a specific date
        --  Multi-hour window - for delivery within any multiple hour
            increment during normal business hours on a specific date
    --  Day-specific delivery precision
        --  Single-day window - for delivery during normal business hours on a
            specific date
        --  Multi-day window - for delivery during normal business hours
            within a specific multiple date range

Shipments using the new Reddaway Guaranteed Window delivery services arrive on time - not early and not late - and receive priority handling and visibility. All four levels of service are backed with the Reddaway standard money-back guarantee. Customers can use Reddaway Guaranteed Window delivery services to reduce charges backs, improve vendor scorecard performance, accommodate installation schedules, and manage their inventory turns with speed and precision.

“Guaranteed Window builds on a Reddaway portfolio that already includes guaranteed 9 a.m., noon and 3:30 p.m. service options,” commented Steve Selvig, vice president of sales and marketing for Reddaway. “Our enhanced services now offer customers more flexibility and more precise delivery times.”

“Our customers know us for our extensive next-day capabilities and our quality service,” added T.J. O’Connor, president of Reddaway. “Now, in addition to speed and reliability, customers can also enjoy day or hour precision that is often equally critical to the management of their supply chains. By using our guaranteed window services, our customers can take the guess work out of their transportation planning process.”

Reddaway, founded in 1919 and celebrating its 90th anniversary of service, is a leading provider of next-day, second-day and expedited less-than-truckload (LTL) services in the western United States and Canada. Its regional service network includes Alaska, Arizona, California, Colorado, Idaho, Montana, Nevada, Oregon, Utah, Washington, Wyoming and western Canada.

YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and Glen Moore. Building on the strength of its heritage brands, Yellow Transportation and Roadway, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kan., YRC Worldwide employs approximately 49,000 people.

YRC Worldwide Inc. announced senior leadership appointments across a new functional organization structure. The changes will further strengthen the company’s focus on critical areas to streamline decision making while eliminating redundant efforts and costs.

The following YRC Worldwide appointments are effective immediately, reporting directly to Zollars:

Sales -YRC Worldwide welcomes John Garcia to the company as Executive Vice President and Chief Sales Officer. In this new role, Garcia will be responsible for sales strategy and results across YRC and the regional operating companies. Garcia’s consolidated sales organization will coordinate sales activities with YRC Logistics to leverage YRC Worldwide global capabilities.

Prior to joining YRC Worldwide, Garcia was the President of Sprint’s largest wireless business unit and Chief Marketing Officer for the corporation, where he was responsible for all strategic sales and marketing initiatives. Before that, Garcia held sales and marketing leadership roles at Sprint, GTE Mobilnet, AT&T Consumer Products and Southwestern Bell.

Operations - Mike Smid, President - YRC Inc. and Chief Operations Officer, will assume responsibility for the operations of all YRC Worldwide regional and national networks including his current leadership role as President of YRC Inc. In that role, Smid recently led the successful integration of the Yellow Freight and Roadway national networks.

Finance - Tim Wicks, currently Executive Vice President and Chief Financial Officer, will lead a newly consolidated organization comprised of all strategic and operational finance activities across YRC Worldwide companies. In addition, Sheila Taylor, currently Vice President, Finance and Investor Relations, will also assume the role of Treasurer reporting to Wicks.

Marketing - Greg Reid, Executive Vice President and Chief Marketing Officer, will lead a consolidated marketing effort, including brand and business development initiatives, supporting all YRC Worldwide companies. In addition to Chief Marketing Officer, Reid most recently served as Executive Vice President, Enterprise Solutions Group.

Technologies and Service - Mike Naatz, Executive Vice President and Chief Information and Service Officer, assumes responsibility for YRC Worldwide Information Technology, YRC Customer Service as well as the strategic direction for the regional customer service functions. Naatz previously led and will continue to lead the enterprise-wide program management efforts initially designed to support the successful integration of Yellow and Roadway.

YRC Logistics - John Carr assumes the role of President for YRC Logistics, leading the YRC Worldwide global logistics management company focused on transportation, distribution and global services for clients. Previously, Carr was Chief Operating Officer for YRC Logistics and President for the Americas and Europe.

Dan Churay, Executive Vice President, General Counsel and Secretary, and Jim Kissinger, Executive Vice President of Human Resources, remain in their current roles, reporting to Zollars.

As a part of the organizational changes, Keith Lovetro, former President, YRC Regional Transportation; Michael Rapken, former Executive Vice President and Chief Information Officer; Jim Ritchie, former President of YRC Logistics; and Christina Wise, former Vice President and Treasurer will be leaving the company. Any remaining transitional activities necessary as a result of these leadership and organizational changes will be completed by the end of June.

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YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Transportation and Roadway, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 49,000 people.

YRC Worldwide Inc clarified that the amendment it finalized to its revolving credit facility with its lenders has the same terms in regards to total liquidity and capacity under the facility that existed prior to yesterday’s amendment. The new amendment does give the company immediate access to the escrow funds of $73 million by means of revolver capacity that can be borrowed at any time without approval from the lenders so long as the company’s cash is below $150 million. The $150 million is a new maximum of cash and cash equivalents that was mutually agreed to by the company and the lender group and set well above the company’s average daily cash usage. The company’s total liquidity includes its cash balance in addition to the availability under its credit facilities, which in total was $242 million at May 31, 2009.

“Yesterday’s amendment reflects the continued support of our lender group as we further implement our strategic actions both operationally and financially,” said Tim Wicks , Executive Vice President and CFO of YRC Worldwide. “We now have immediate access to the escrow funds, which is a month before the original agreement, and there is not an immediate reduction to our capacity.”

The company did not pay any fees to the lender group associated with this amendment.

YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Transportation and Roadway, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 49,000 people.