USF Logistics services YRC Logistics

feedbackUnion Strongly Approves Extending Most Concessions, after Soundly Rejecting Earlier Proposal; LTL Giant able to Restructure Crushing Debt after Vote


SCDigest Editorial Staff

Struggling less-than-truckload carrier YRC Worldwide, recently falling back into financial turmoil after seemingly having stabilized itself over the past year, has a new lease on life after a couple of key decisions went its way over the past few days.

First was a vote by the companies Teamsters union to in some manner extend most concessions truck drivers and other workers had approved in 2010 and 2012 through 2019, versus the original sunsetting of those give-backs at the end of March, 2015.

While still losing money, YRC made its first operating profit in six years in Q1 of 2013, and painted a largely rosy financial picture for the rest of the year, until dropping the unexpected bomb on the union in December..
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That positive vote, after the company's 25, 000 union members had initially rejected the company's seemingly rushed proposal a few weeks earlier, in turned led to YRC being able to restructure some of its mammoth debt, which the company had told the union it would be unable at some point soon to repay without extending the cost-saving concessions.

YRC had about $1.4 billion in debt, much of which is due in the next two years. The company's creditors had previously said the company needed to curb its expenses by extending its current labor contract before it could secure the additional or revised financing.

Almost immediately after the vote, YRC was then able to a complete a previously arranged deal with investors and lenders that reduces its debt by $300 million. Separately, Moody's Investors Service said the company was working on two other measures covering $1.15 billion of additional debt.

All told, YRC is said to be operating with more debt than all the other publicly held LTL carriers combined.

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Q&A

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What Is Third Party Logistics?

If you outsource your logistics requirements to a service provider, that service provider is called a third party logistics provider. In industry parlance, these service providers are also referred to as 3PL.
One of the basic strengths of the ecommerce paradigm is that participants get to perform roles that they specialize in. As a result, outsourcing to a third party logistics organization fits well with the ecommerce ecosystem.
What Services Does a 3PL Provide?