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Mar. 03, 2014

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SURFACE & DOMESTIC TRANSPORTATION 100 THE JOURNAL OF COMMERCE www.joc.com MARCH 3.2014 That 's not a n id le cla i m — $4.9 billion Y RC Worldw ide is t he second-la rgest LTL opera- tor in terms of revenue after FedEx Freight, and its four subsidiaries hauled almost as much tonnage in the third quarter as FedEx Freight. Welch estimates YRC handles about 20 percent of the volume handled by publicly owned LTL carriers. "We think our share has stabilized, and we've been growing it," he said. Whether that tonnage and market share continue to grow depends entirely on Welch and his team. The refinancing clears out the last of the issues that could or should be laid at the door of YRC Worldwide's previous management team, led by former Chairman, President and CEO Bill Zollars. Through acquisitions, that group built YRC Worldwide into a $9.9 billion company in four years, only to see its revenue plummet in the recession. YRC has lost more than $3 billion since 2006. With a five-year runway from the refi- nancing and labor concessions, it's up to Welch, more than anyone, to make YRC Worldwide work. JOC Contact William B. Cassidy at wcassidy@joc.com and follow him at twitter.com/wbcassidy _joc. A STRONGER ECONOMY in 2014 could mean tough choices ahead for many shippers, with pricing volatility and spot equipment shortages potentially disrupting supply chains, Penske Logistics warns. "It's clear that volumes are improving, and that creates challenges," Andy Moses, senior vice president of global products at Penske Logistics, told the JOC. "Trucking isn't adding capacity quite as fast as volume is growing. That creates upward movement in rates and, at times, potential equipment shortages." Moses expects modest trucking price increases in 2014. "We wouldn't be looking at anything like the 5 percent range, but 1 or 2 percent sounds believable," he said. "But there are niches where we could see more volatility, pockets that flare up." Logistics managers unprepared for vola- tility could find themselves in a tough spot, Moses said. "You can do a fantastic job run- ning your supply chain, but if freight rates go up 3 or 4 percent, for a large shipper, that can mean several million dollars off your bottom line," he said. "The board of directors isn't going to say, 'Aw, shucks.' " How high truck pricing might climb in 2014 depends on the strength of the econ- omy and the limits of truck capacity, both open questions at this point. Economists are debating whether weaker-than-expected indicators in manufacturing and job growth in January can be blamed largely on the impact of severe weather in what is typi- cally a slow month post-holidays or reveal greater underlying weakness in the U.S. economy. Based on the freight volumes moving through its customers' supply chains, Pen- ske Logistics is still cautiously optimistic. "Overall, the economy is more encourag- ing," Moses said. "We're not racing up and down the halls high-fiving each other, but specific sectors we play in very significantly are doing better, automotive being one. Food LOGISTICS 101 A pickup in economic growth will test shippers and their supply chains. Who will make the grade? By William B. Cassidy "It is absolutely impossible to get in an operating rhythm when you're constantly stopping and starting

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