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YRC Worldwide Inc. Message Board

  • s.eranger May 29, 2009 9:01 PM Flag

    The Death Of Transportation in the US

    We live in a price-driven economy in regards to transportation.

    The game is over for good.

    Service doesn't matter, not that YRC was ever worth a sh-it.

    Capacity is unprecedented....airlines, truckers and ocean carriers are begging for cargo.

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    • K

      I have to disagree respectfully with you on tariffs

      They are not contracts....
      They are merely documents (agreements) telling the shipping public what has been agreed to with a carrier.

      They are not binding as far as volumes of shipment are concerned. We all want our customers to use our negotiated agreements but legally they are not bound by tariffs ....

      They are also now private as very few if any use Rocky Mountain type tariffs-----deregulation took care of that...

    • Diva,

      We control capacity, not that we exercise much SELF-control...ha..ha..ha! We do NOT control price levels.

      YRC ceasing business does NOT eliminate capacity, it merely constricts it for a very brief time until the former YRC people and equipment are re-allocated by the market. Ya see, that's what a lot of posters miss - YRC ceasing business does NOT really affect the capacity/price level relationship for very long. Just watch; you'll see what I mean after it happens.

      Give your Poppa a hug from me and don't let him spill too much of your sauce on his shirt! My gang is grilling burgers for me around 7pm your time - I'll be thinking of you.

      Your friend,
      T L F

    • To put it succinctly:
      What a great post, every word of it true.
      But I do have a question - if capacity leaves the market, do you have no hope of pricing returning to relatively sane levels, not even slightly? I would think that less capacity would stabilize this mess. Interested in your thoughts.

    • Watching this pricing 'game' for the past 30 years I have noticed that just like everything else in the LTL biz, we have the normal human tendency to 'continue to continue'.

      That is, we keep trying to do what worked yesterday.

      So, when you check out the history of of pricing for any customer you consistently find these things:

      <> The LEGACY impact. If account 'X' had commodity rates (remember those?), hidden loading allowances and accessorial waiver 'dispensation' from the incumbent LTL carrier prior to deregulation, then they came out of the chute in the early 80's with the biggest discounts. Generally, those 'continued to continue' to the present. Account 'X' had desireable traffic characteristics waaaay back when and still does. The competitive nature of deregulation has pushed the pricing levels so low that legacy carriers hauling this freight got put out of after another. YRC still has a bunch of this business. After we are gone, woe be to those who try to make a profit off these accounts - my heart goes out to you. In an unregulated market, these hummers will remain unprofitable, but ironically, highly sought due to those desireable traffic/volume characteristics. I think of these as 'jelly donut' accounts, they make one's mouth water, but they eventually kill you.

      <> The 3PL dilemma. Shipper consolidators under regulation gave way to 3PLs. Similar to the 'jelly donuts', these are irresistable to Sales due to the high revenue we (mistakenly) attribute to them with our 20th century account tracking/sales remuneration philosophy. We lump multiple accounts together under one 3PL umbrella and get a big $ number to incent/fixate/obsess our Sales owner(s). This is artificial and counterproductive. Even when (if) we run separate ORs and/or costings for the various entities, the whole enchilada is at stake so EVERY account gets the lowest common denomination pricing formula. Another example of: the bigger the account, the less profit we make.

      <> Eating our seed corn. Under deregulation, we quickly learned this counter-intuitive, and inverse truism: the SMALLER the account, the HIGHER the profit. Why? They were less likely to have a salesperson call on them and they were less likely to have the knowledge that lower pricing was available. We grew our pricing structures to exploit this segment. Paradoxically, but inevitably, we started competing for this segment, too. Now we have customers with less than 10 shipments a month getting pricing almost as low as the big hitters.

      So, NOBODY makes money today.

      I predict that NOBODY makes very much money after we are gone.


      Because THE MARKET controls the price level now - deregulation is complete.

      With YRC gone, the remaining LTL carriers will 'continue to continue' and find their results disappointing. Look to the airline industry. They deregulated 2 years before us and had only a tiny fraction of the number of competitors that we had. What has been THEIR experience? Lower wages, worse service and TERRIBLE earnings.

      The only aspect of BOTH industries that continues to be regulated is safety. It's no accident (good pun, eh?) that safety continues to be the one area we can both point to with some pride.

      Eventually, re-regulation will return because transportation is NOT a service - it is a utility, it is part of our infrastructure. However, it will take many more years of disappointment for the 'pain point' to be severe enough to take this on.

      Transportation will eventually be greener, leaner and a healthy way for workers to make a living.

      Transportation will not die - it will be reborn. We just can't get there by 'continuing to continue'.

      Happy Fathers Day!

      Warm regards to you all,
      Too Late Freight

    • Good Morning Ken!

      Customers lying about their pricing? Nah - never happens, haven't run into it, could it be true? I will say my particular pricing analyst is a "if it's not written, it's rumor" kind of person. I envision a cubicle in Kansas just FULL of abacuses.

      As for customers who claim they are the decision maker but actually aren't? Again, say it isn't so. These are ALWAYS delicate situations though. How to get to the actual decision maker without stepping on anyone's.... well, you know.

      I thank you for your kind words and I do appreciate them. Have a wonderful day!

    • You are correct, sir. My apologies.

    • The word is 'accessorials'.

      They used

    • Ken see my previous post.
      Its not Sept 2 but July X
      Who in their right business 101 mind buys at 5 sells at 1 and borrows 4 to stay capatalized?
      This is a deliberate bankruptcy!
      Shareholders are being screwed but the neo con major corporate financial owners understand why Unions must go so they will loose these shares without a peep!
      Hope the SEC looks at this one CF had a Bush SEC.
      Any freekin kid with a Koolaide stands understands thet the price of his koolaide has to be more than the Koolaide powder, Water, sugar and labor!
      Even on your worst LSD day the baddest of the baddest TRIPS you know how to breath!

    • Then you have never used ABF, we do all of that and more.

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