MILE MARKER #58
FedEx is taking a $1.2 billion hit against its fiscal fourth quarter earnings. These charges also include its purchased Kinko's and Watkins Motor Freight businesses.
The under performing Kinko's was purchased in 2004, and was renamed to FedEx Office. FedEx said in a securities filing that it expects to take a $810 million charge against Kinko's.
Also, FedEx expects to take a $80 million hit for the reduced goodwill for Watkins. Watkins is a LTL (less than a truckload) carrier. They bought Watkins in 2006, hoping to beef up its trucking operations.
Furthermore, these charges, along with around $300 million in already disclosed charges, will be included in FedEx's fiscal fourth quarter financial results.
The front-runner to the goodwill impairment was FedEx Office and FedEx National LTL's weak performance from terrible economic conditions.
FedEx is joining the several other trucking companies where their acquisitions made in recent years are deteriorating from the downturn, that has dwindled away at shipping business.
Thursday, June 11, 2009
Thursday, June 4, 2009
THE ECONOMY AND TRUCKING
MILE MARKER #57
As you may have noticed, it is easier to find a parking spot in the truck stops and rest areas now days. This is the worst economy in a generation, and trucking has been kicked hard, right in the air bags. The numbers of truckload freight and LTL freight has declined sharply. It looks like it's going to be awhile before we see improvement. Consumer spending needs to turn around, the unemployed need to become employed, and the inventory-to-sales needs to improve.
Economists say, that usually in times like these, trucking was the leading indicator, preceding the end of the economic downturn, by as much as ten months. The business inventory-to-sales ratio is so bad that trucking will not lead the economy out of this recession.
Recently, it seems like the freight has been picking up in the last three weeks. Hopefully, it is sign that things are starting to turn around. I just keep showing up for work and hope for the best. Its got to get better. Can it really get any worse? I don't know, but my checks still cash without any problem. That's the main thing right now, even though I am about $500.00 to $600.00 lighter a month in my checkbook. That 10% give back is killing me. Inside, I get a little more pissed than usual. Seriously, I made more money 15 years ago. You see it happening to a lot of trucking companies right now - taking more and more from the drivers to keep the company afloat. I'm concerned that the recent spike in fuel at this time will be the dagger to some outfits that made it thus far.
I shouldn't be whining at time like this, but enough is a enough. I guess I should be happy I am working, unlike some friends and other co-workers. Not only my checks are smaller, I now have a longer commute to my new terminal, which is more in gas and wear and tear on my personal vehicle. Oh yeah, I got a new route now. Also, I'm in the process of learning the metro area hauling around a 48 or 53 footer. Fun fun when you don't know the ins and outs of the city all day long. I have been flipped off on a daily basis. They tried to send me with a few skids to a grocery warehouse, but I said no thanks to that task. I'd would rather go try on dresses! I did enough of "sort and segregate" back in the day. It's somebody Else's turn. I still can't believe that in this day in age, those food warehouses still get away with all that crap. What a racket. That's a whole other blog of worms. For now, I'll keep all my anger bottled up inside like the professional that I am, but I don't know how much more I can take.
I will leave you with a heart-wrenching fact. Did you know that 50% of the bankruptcies are health related? 70% of that 50% had health insurance. Really? Go figure.
:) That's me on the outside.
#$%& That's me in the inside.
I keep thinking: Only twelve more years.
Drive safe.
As you may have noticed, it is easier to find a parking spot in the truck stops and rest areas now days. This is the worst economy in a generation, and trucking has been kicked hard, right in the air bags. The numbers of truckload freight and LTL freight has declined sharply. It looks like it's going to be awhile before we see improvement. Consumer spending needs to turn around, the unemployed need to become employed, and the inventory-to-sales needs to improve.
Economists say, that usually in times like these, trucking was the leading indicator, preceding the end of the economic downturn, by as much as ten months. The business inventory-to-sales ratio is so bad that trucking will not lead the economy out of this recession.
Recently, it seems like the freight has been picking up in the last three weeks. Hopefully, it is sign that things are starting to turn around. I just keep showing up for work and hope for the best. Its got to get better. Can it really get any worse? I don't know, but my checks still cash without any problem. That's the main thing right now, even though I am about $500.00 to $600.00 lighter a month in my checkbook. That 10% give back is killing me. Inside, I get a little more pissed than usual. Seriously, I made more money 15 years ago. You see it happening to a lot of trucking companies right now - taking more and more from the drivers to keep the company afloat. I'm concerned that the recent spike in fuel at this time will be the dagger to some outfits that made it thus far.
I shouldn't be whining at time like this, but enough is a enough. I guess I should be happy I am working, unlike some friends and other co-workers. Not only my checks are smaller, I now have a longer commute to my new terminal, which is more in gas and wear and tear on my personal vehicle. Oh yeah, I got a new route now. Also, I'm in the process of learning the metro area hauling around a 48 or 53 footer. Fun fun when you don't know the ins and outs of the city all day long. I have been flipped off on a daily basis. They tried to send me with a few skids to a grocery warehouse, but I said no thanks to that task. I'd would rather go try on dresses! I did enough of "sort and segregate" back in the day. It's somebody Else's turn. I still can't believe that in this day in age, those food warehouses still get away with all that crap. What a racket. That's a whole other blog of worms. For now, I'll keep all my anger bottled up inside like the professional that I am, but I don't know how much more I can take.
I will leave you with a heart-wrenching fact. Did you know that 50% of the bankruptcies are health related? 70% of that 50% had health insurance. Really? Go figure.
:) That's me on the outside.
#$%& That's me in the inside.
I keep thinking: Only twelve more years.
Drive safe.
Sunday, May 17, 2009
YRC APPLIES FOR TROUBLED ASSET RELIEF PROGRAM MONEY
MILE MARKER #56
YRC Worlwide is seeking $1 billion in federal bailout money to help relieve the obligations for pensions. Experts in the industry say that the company's odds of actually getting TARP (Troubled Asset Relief Program Money) are slim to none. The move comes as the trucking heavyweight struggles to shore up its finances. The company's ability to make it through the recession will have significant implications for the trucking industry and large customers across the nation.
YRC owns a 20% share of the national market in the less-than-a-truckload industry. LTL is trucking companies who combine multiple customers' loads into a single truck. The bailout request comes at a time when YRC is taking steps to cut costs and raise cash.
YRC's Chief Executive William Zollars thinks that the company shouldn't be forced to pay the pensions of employees who never worked at YRC. Zollars says that the company is making really good progress on its financial recovery plan and thinks that YRC shouldn't have to carry this extra burden. Even if denied the TARP funds, it's a way to get the dialogue started about the pension issue.
Sunday, May 3, 2009
UNIONS AND THE EMPLOYEE FREE CHOICE ACT (EFCA)
MILE MARKER #55
For those who wish the Unions would disappear, sorry, even in this economy Unions grew with 43,ooo additional members in 2008 across the country. Even if you are Union or not, Unions are good for everybody that's trying to make a living. Unions set the standard pay for various fields in the work force. One example is - LTL trucking. Why do you think company drivers for Conway,Estes, and FedEx are making the hourly rate that they are? They can thank the Union trucking companies.
The Unions organized the new 43,000 members without the Employee Free Choice Act (EFCA) despite the best efforts of former president Bush and the most anti-union administration. I know you are asking why in a year where 2.8 million Americans lost their jobs, did the union membership explode to record levels? The Teamsters and labor in general have gotten really aggressive about organizing, and tough economic times demonstrate how valuable unions are to working women and men. Non-union workers think they are fine when the economy is thriving, but when jobs go south, who is representing and fighting for you when your jobs on the line?
The projected prediction is, with president Obama and the congress passing the (EFCA), Teamster membership will double over the next few years. The larger a union becomes, the stronger we are as workers.
Why do you think cooperate America has highly-paid lobbyists trying to throw this bill out?
For those who wish the Unions would disappear, sorry, even in this economy Unions grew with 43,ooo additional members in 2008 across the country. Even if you are Union or not, Unions are good for everybody that's trying to make a living. Unions set the standard pay for various fields in the work force. One example is - LTL trucking. Why do you think company drivers for Conway,Estes, and FedEx are making the hourly rate that they are? They can thank the Union trucking companies.
The Unions organized the new 43,000 members without the Employee Free Choice Act (EFCA) despite the best efforts of former president Bush and the most anti-union administration. I know you are asking why in a year where 2.8 million Americans lost their jobs, did the union membership explode to record levels? The Teamsters and labor in general have gotten really aggressive about organizing, and tough economic times demonstrate how valuable unions are to working women and men. Non-union workers think they are fine when the economy is thriving, but when jobs go south, who is representing and fighting for you when your jobs on the line?
The projected prediction is, with president Obama and the congress passing the (EFCA), Teamster membership will double over the next few years. The larger a union becomes, the stronger we are as workers.
Why do you think cooperate America has highly-paid lobbyists trying to throw this bill out?
Saturday, April 25, 2009
LOCAL TRUCKING JOB OPPORTUNITIES DECREASE
MILE MARKER #54
Spring has arrived, and everyone is patiently waiting for the freight tonnage to increase. Maybe the stimulus package will flex its muscles and lift the economy. We'll see. Some of us were lucky enough to hang on to our jobs, others have involuntarily left, and haven't punched-in for some time. For those hanging on by a bungy cord, cross your fingers.
I am a part of the YRC brand and went through the Roadway/Yellow merger myself, but luckily, still hanging on. I went from number five to thirteen, with the seniority combination. My dreams of transferring to line-haul crumbled when they eliminated the road board at my terminal. If the guy I was waiting for retired when planned, I would have went into the merger with six months of seniority on the line-haul board and would have been squeezed out of the equation in the merger. Things happen for a reason.
I've watched co-workers lose their jobs or get laid off. Those guys are scrambling for jobs around the city, jobs that are just aren't there. Minimal freight. Some are fortunate to get hired with a different company, but outsiders waiting to get hired with YRC are going to have a long wait. Drivers that got laid-off stay on the seniority list for four to five years, and will get called back when the freight increases. A long list.
Before the merger, rival companies used questionable sales tactics to land additional freight, by telling customers that YRC was going out of business. Bad practices when freight is scarce. Simply, bad business. I personally have spent extra time with my customers reassuring them that YRC is alive and well, and is not going anywhere. The combination of Roadway and Yellow was a huge task, but overall, the merger of this LTL giant makes competitors nervous. The heavyweight of LTL. Truth of the matter is, when the economy is strong, there is enough freight for everyone, but when weak, competitors will do what ever it takes to get an additional skid. Minor glitches and bumps were inevitable, but expected. Now, YRC can look forward to the future, to gain and retain customer's and their needs. Transportation innovation at its finest.
Spring has arrived, and everyone is patiently waiting for the freight tonnage to increase. Maybe the stimulus package will flex its muscles and lift the economy. We'll see. Some of us were lucky enough to hang on to our jobs, others have involuntarily left, and haven't punched-in for some time. For those hanging on by a bungy cord, cross your fingers.
I am a part of the YRC brand and went through the Roadway/Yellow merger myself, but luckily, still hanging on. I went from number five to thirteen, with the seniority combination. My dreams of transferring to line-haul crumbled when they eliminated the road board at my terminal. If the guy I was waiting for retired when planned, I would have went into the merger with six months of seniority on the line-haul board and would have been squeezed out of the equation in the merger. Things happen for a reason.
I've watched co-workers lose their jobs or get laid off. Those guys are scrambling for jobs around the city, jobs that are just aren't there. Minimal freight. Some are fortunate to get hired with a different company, but outsiders waiting to get hired with YRC are going to have a long wait. Drivers that got laid-off stay on the seniority list for four to five years, and will get called back when the freight increases. A long list.
Before the merger, rival companies used questionable sales tactics to land additional freight, by telling customers that YRC was going out of business. Bad practices when freight is scarce. Simply, bad business. I personally have spent extra time with my customers reassuring them that YRC is alive and well, and is not going anywhere. The combination of Roadway and Yellow was a huge task, but overall, the merger of this LTL giant makes competitors nervous. The heavyweight of LTL. Truth of the matter is, when the economy is strong, there is enough freight for everyone, but when weak, competitors will do what ever it takes to get an additional skid. Minor glitches and bumps were inevitable, but expected. Now, YRC can look forward to the future, to gain and retain customer's and their needs. Transportation innovation at its finest.
Like I expected, YRC drivers giving back with wages would become a trend with other companies, some less, some more. Think optimism, and hopefully trucking will get rolling again. Fingers crossed. As drivers, we are all in the same trailer.
Friday, December 19, 2008
FEDEX FOLLOWS YRC TREND - WAGE CUTS
MILE MARKER #53
YRC was the first to announce company wide wage cuts to weather out the storm. "Uncertainty" is the storm's name, and is blasting through as we speak. It's hitting us sideways!
As unemployment rises and workers lose negotiating power, it's easier for companies to trim pay. I knew it was a matter of time before other companies followed YRC's foot steps, that cut a path through the rugged economy.
When YRC announced the cuts, companies like FedEx and Conway tried to use that towards their advantage. They jumped all over that. FedEx advertisements suddenly came out with YRC troubles mentioned in them, trying to get an edge in today's tough market. I don't agree with these practices. Furthermore, I would consider that illegal in my mind, but hey, who am I? This happens every time before a contract comes due also.
SCENARIO:
FEDEX says, " You better jump aboard right now, because if there is a strike, we won't be able to handle all the business."
Give me a break!
What ever it takes I guess. I find it comical.
Welcome to the real world. FedEx is cutting 36,000 salaried workers by 5 % starting January 1st. The cuts include Fred Smith, President/Chief Executive Officer. He is accepting a pay cut of 20%. The cuts include a suspension of merit raises and company contributions to 401K plans also. A 7.5%-10% for other senior FedEx executives too.
We are all in the same boat no matter who you work for. The boat is half full of water, let's all stick together and keep it from sinking. Keep paddling.
Wednesday, December 10, 2008
TRUCKLOAD AND LTL SURVIVAL TACTICS
MILE MARKER # 52
Survival mode is engaged for both less-than-a-truckload and truckload companies during this rough stretch. You will probably see a spike in consumer spending for the month of December, due to holiday responsibilities. People will spend what little extra cash they have to make Christmas happen, but probably will go into hibernation for the next three or four months of the new year.
Truckload carriers tend to weather the storm in a weak economy better than LTL carriers. The profit outlook is much more negative for LTL than truckload for the near term. Industrial freight is very weak at this time, and that's more of the core business for LTL. Truckload carriers haul more consumer goods and staples.
The economy continues to soften, and nobody is exactly certain where the bottom is. Companies continue scrambling to make necessary changes that coincide with the present economy. Conway is changing its network by trimming the roster of terminals and rescheduling their line haul shipments. YRC is doing what they are doing with the merger and Teamster relief. I've covered those processes in previous blogs. I found it interesting that ABF wants to get labor concessions similar to what YRC's companies are getting, but there is a catch. At the Union meeting, a couple of ABF representatives were present, but when they found out that YRC management was involved with the 10% giveback, they didn't want any part of it. They were like, "Management too?" They said, "No, we're good." It's funny how they changed their tune. They were all about screwing the driver though, they ran to the meeting. At least YRC cut the whole entire work force 10% to try and get through these hard times. We'll see what ABF eventually decides to do.
When the trucking industry starts to rebound, the surviving carriers will do well. The question is, "Who will survive?"
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