Not to be outdone by recent expansion announcements from competitors, less-than-truckload (LTL) carrier YRC Worldwide (NASDAQ: YRCW) is expanding its regional next-day service.
In a Wednesday press release, the Overland Park, Kansas-based carrier said the addition of more lanes in the mid-South and Waco, Texas, is part of its network restructuring.
“Through Regional Next-Day service, our customers in Texas and the mid-South can access just-in-time scheduling that offers benefits of lowered inventory cost and fewer supply chain interruptions,” stated Chief Network Officer Scott Ware in the press release. Ware said the service has been “very successful” since it was launched in Texas last fall.
The service now includes 11 terminals in Texas and is expanding to include six new states: Arkansas, Missouri, Oklahoma, Louisiana, Tennessee and Mississippi. The carrier expects the service to provide faster transit times with lower damages as touchpoints are reduced. YRC aims to turn around operations after receiving a $700 million Treasury loan. The carrier said during its second-quarter call that it was ready to embark on a $400 million fleet upgrade.
LTL industry heating up
Competition in the LTL industry appears to be heating up, with a few companies announcing expansion plans in the past week alone.
On Wednesday, FedEx (NYSE: FDX) confirmed its freight division was opening a new 166-door LTL facility in Laredo, Texas. On Monday, Old Dominion Freight Line (NASDAQ: ODFL) announced it had already opened nine terminals in 2020. Last week, Forward Air (NASDAQ: FWRD) said it would further pursue traditional LTL operations, outside of its normal airport-to-airport network, just two weeks after announcing it would run traditional LTL operations for the first time out of its Savannah, Georgia, facility.
The industry’s growth comes amid a turnaround in tonnage after the April low, which resulted in most carriers seeing year-over-year revenue declines in excess of 20%. Those declines had narrowed by June, improving to single-digit declines during July. On their second-quarter earnings calls, Old Dominion reported revenue was only 3% lower during July, with ArcBest Corp. (NASDAQ: ARCB) reporting a 7% revenue decline in its asset-based segment for the month.
The improvement isn’t surprising as demand has rebounded significantly since the April depths of the pandemic, which resulted in widespread manufacturing shutdowns. The industrial patch, including manufactured goods, can represent nearly 85% of total tonnage for some LTL carriers.
“The expansion of Regional Next-Day services is a strategic investment to position YRC Freight for growth, operational improvements and continued responsiveness in servicing our customers with the YRCW companies’ strong, flexible network. We remain obsessive about providing safe, fast, reliable and high-quality service to our customers,” said Chief Customer Officer Jason Bergman.