Consolidation coming: YRC to shut down New Penn headquarters
YRC Worldwide, still struggling to find its financial footing in one of the best freight environments in a generation, is trying to cut its way back to prosperity.
The less-than-truckload giant is shuttering the Lebanon, Pa., administrative headquarters of regional LTL subsidiary New Penn and consolidating those operations at its Overland Park, Kan., corporate headquarters.
The move will cost an unknown number of New Penn administration staff positions. The company emphasized that none of the New Penn terminals/service centers will be affected. New Penn posted $295 million revenue last year as the nation’s 21st-largest LTL operation, according to statistics compiled by SJ Consulting.
YRC Worldwide CEO Darren Hawkins emphasized the move was strictly financial and hoped this would jump-start YRC’s fiscal recovery. He did not say whether such moves were also planned at YRC’s Holland regional facilities in the Midwest or Reddaway’s regional operations in the West.
“We made a commitment earlier this year to our stakeholders including customers, employees, board members and shareholders that we would bring the company back to solid financial footing while continuing to improve our service,” Hawkins wrote in an email to all YRC employees on July 8.
“I truly believe that the decision to consolidate these positions is a critical step towards achieving this goal,” Hawkins added. “These are tough decisions, and I do not take them lightly. I know that decisions like these create uncertainty and concern for employees wondering what changes are next.”
Hawkins said “most likely” there would be additional changes coming. “Our five-year plan must be built on the foundations of building density in our network, delivering the best service for our customers and the right cost structure for our volume levels.
“The changes that may come next have not been determined,” Hawkins added. “But my commitment to you is that I will always be up front and honest with you as changes develop.”
In the first quarter, New Penn was part of a regional LTL group that posted a $7 million operating loss on $438 million revenue, compared with a $5.2 million operating profit on $463 million revenue in the 2018 first quarter. YRC regional carriers posted a 101.6 operating ratio in the first quarter, compared with a 98.9 OR in the year-ago first quarter.
