Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
A firm controlled by a YRC Worldwide Inc. director who was chosen by the Teamsters union signed a contract with
YRC in late February to perform advisory services in "connection with one or more potential transactions and/or
strategic initiatives" that YRC may pursue, according to a filing with the Securities and Exchange Commission (SEC).
According to a highly placed source, New York-based MAEVA Group LLC, a corporate restructuring firm, was involved in
YRC's efforts to make an informal and unsolicited offer in late March to acquire Arkansas Best Corp., the $2.1 billion
holding company whose main unit, less-than-truckload carrier ABF Freight System Inc., is one of YRC's chief unionized rivals.
The source did not know the extent of MAEVA's involvement.
Its founder, chairman, and CEO, financier Harry Wilson, was one of two directors picked by the Teamsters to
sit on YRC's board. Wilson joined the board in July 2011.
Teamster officials, including General President James P. Hoffa, were unaware of MAEVA's participation
until about two weeks ago, according to the source. Nor were union officials aware of the Feb. 20 agreement
between YRC and MAEVA at the time it was consummated, the source said. The disclosure was made in the company's
most recent annual 10-K filing with the SEC, dated Feb. 21.
YRC officials did not respond to requests for comment by press time.
According to the filing, MAEVA was to be paid $250,000 in monthly fees for the next four months
from the date of the filing. The firm would also receive a maximum of $5.5 million in what YRC called
"completion fees." The agreement expires on Dec. 31 unless extended by mutual consent or terminated by
YRC with 30 days written notice, according to the filing.
Wilson, 41, worked for Goldman, Sachs & Co. and the Blackstone Group, two of the finance industry's heavyweights,
and was then named partner at private equity firm Silver Point Capital before he retired at 36. He served on President
Barack Obama's auto industry crisis task force and played a key role in the restructuring of General Motors Corp. after
the automaker's bankruptcy filing.
Wilson did not return an e-mail request for comment.
Wilson was chosen to the board of YRC by the Teamsters in the wake of a major restructuring that kept
YRC out of bankruptcy. The union, which represents approximately 25,000 YRC workers, was awarded two board
seats as well as a chunk of YRC stock in return for wage concessions of 15 percent and a dramatic scaledown
in the company's pension contributions. Overland Park, Kan.-based YRC was allowed to suspend pension contributions
from mid-2009 until the start of 2011, when it resumed them at only one-fourth of its historical levels. The company
isn't expected to restore full contributions until 2015 at the earliest.
The Teamster concessions were pivotal in saving YRC from a bankruptcy filing and possible dissolution at the end of 2009.
James Welch, who was named YRC's CEO in July 2011, met with Arkansas Best President and CEO Judy McReynolds on March 22 at
Arkansas Best's headquarters in Fort Smith, Ark., to discuss a possible combination. In a March 25 letter to McReynolds, YRC's
board and management is "very supportive of our desire to work with ABF in an attempt to move a transaction forward. We think
our indication of consideration is appropriate and meaningful for the shareholders of ABF."
DC Velocity broke the story of the CEO meeting in its online edition last Wednesday.
Arkansas Best confirmed in a statement that evening that talks were held concerning a possible YRC buy-out of ABF. However, Arkansas Best said in the statement it had told YRC in early April that it wasn't interested in an involvement at the time. It cited, among other things, intense negotiations with the Teamsters over a new collective bargaining agreement with ABF that the company said was critical to its efforts to remain competitive. ABF has the highest labor costs in the LTL industry.
The two companies have not communicated since April, Arkansas Best said in the statement.
YRC confirmed in a statement on May 9 that it had approached Arkansas Best in March about buying the entire company, which would include not only ABF but Panther Expedited Transportation, the nation's second largest expedited transportation carrier behind FedEx Custom Critical, a unit of Memphis-based FedEx Corp. The source said YRC had made an informal proposal of $18 a share, which would value Arkansas Best at about $400 million based on the stock's closing price on Friday.
"Our board and management believed then and believes now that the combination of Arkansas Best and YRC would be in the best interests of all employees, customers, and shareholders of both companies," Welch said in the YRC statement.
In subsequent interviews with various media outlets, Welch defended the proposal as a sensible approach to increasing shipment density within the companies' networks. He also said that after spending two years revamping the company's operations to improve efficiencies and drive down costs, it was time to take a bold growth-oriented step.
As of press time, Welch had not spoken to DC Velocity.
Word of a possible buy-out was greeted harshly by the Teamsters, which also represent ABF workers. General President James P. Hoffa said in a statement Friday that it was "unconscionable" that YRC would move on a possible acquisition of Arkansas Best while the union and the LTL unit are in the midst of highly charged and sensitive contract talks. "This interference in the collective bargaining process is an affront to all of the hardworking men and women at both companies," Hoffa said.
On May 3, ABF and the Teamsters' international union agreed on a tentative five-year contract. Leaders of Teamster locals representing ABF workers will meet early next week to review the proposal. If the locals approve it, the compact will be mailed to ABF's rank-and-file for a ratification vote.
Channel: Transportation
Classification: LTL, Labor
Companies: Arkansas Best, YRC
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.