WINNIPEG — The writing was on the wall for YRC Worldwide more than once, or so it seemed, and so its competitors hoped.
Like a cat with nine lives, the North American LTL giant always managed to fend off danger when it seemed the carrier was on the verge of bankruptcy, and Clayton Gording expects things to continue to turn around for the company.
Gording is president of YRC Reimer Express Lines — the Winnipeg-based carrier is home to YRC’s Canadian operations (and was recently re-branded YRC Reimer) — and was one of the speakers at the Future of Trucking Symposium, recently hosted by the University of Manitoba Transport Institute.
In talking about the future of the LTL market (which he still sees as a viable market, despite getting squeezed from couriers on the bottom and TL carriers on the top) he touched briefly on the future of YRC.
Channeling Mark Twain, Gording quipped, "the rumors of our demise have been greatly exaggerated."
At the very least, YRC’s financial situation has been greatly documented.
YRC, as a whole, accounts for about 20 percent of the LTL market in North America. There would be a lot of business up for grabs if the carrier did go under, and more than a few competitors were aligning their assets in anticipation.
Most recently though, YRC was able to negotiate a $70 million deal with investors that will help the carrier meet impending debt obligations. The company said that the deal calls for the sale of $70 million of its 6 percent senior convertible notes due 2014.
“We’re not out of the woods, but with some economic return and volumes, we’re going to be here for a long time,” says Gording. “There are 40,000 people in this company who are determined to make it work.”
Economic return, however, could be a slow process. Gording estimates the LTL industry is at about 25 percent overcapacity.
“The problem is overcapacity. There are trucks parked, trailers parked and terminals working at two-thirds capacity. It spurs rate cutting and gets us all into business we shouldn’t be in,” he notes. “If nothing happens we’re looking at 10-12 years to fill the pipe again. It’s going to be a slow, slow recovery.”
Despite the length of time it may take for the market to see a recovery, Gording — who began his career with Reimer Express in 1966 serving in a variety of clerical positions at the Regina head office — is determined to stick around to see how the current situation plays out.
“I’ve been here for 44 years and I’m not going anywhere; I’m just like you guys, I want to see how it ends,” he adds.
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