In a coup for YRC Worldwide Inc., three top less-than-truckload (LTL) operations executives have joined its YRC Freight national LTL unit, including the executive responsible for building the highly regarded line-haul operations at rival Con-way Freight.
The Overland Park, Kan.-based company said today it had named Chet Richardson as vice president of transportation. Richardson has spent 31 years in the LTL industry, including more than 20 years at Con-way Freight, where he left as vice-president of line-haul. Under Richardson, Con-way Freight established what several observers said was the gold standard of LTL line-haul operational reliability and efficiency. Con-way's parent, Ann Arbor, Mich.-based Con-way Inc., was acquired last year by Greenwich, Conn.-based XPO Logistics Inc. for $3 billion in the largest acquisition in the history of U.S. trucking.
In addition, Paul Lorensen was named division vice president of YRC Freight, responsible for the unit's central divisions. Lorensen also came from Con-way Freight, where he was central area vice president of operations. Like Richardson, Lorensen has more than 30 years in the LTL sector.
The third hire, Don Hinkle, was lured out of retirement at FedEx Freight, Memphis-based FedEx Corp.'s LTL unit, where he last served as vice president of transportation. At YRC Freight, Hinkle was named to the new post of vice president of equipment services. Hinkle, who has spent 23 years in LTL terminal operations and fleet maintenance, retired from FedEx Freight in mid-2015.
Richardson and Lorensen actually joined YRC sometime in November, resigning from XPO after it closed the Con-way transaction on Oct. 30. Neither executive was bound by a "noncompete" clause, and their departures did not sit well with XPO, according to one source. Hinkle is believed to have joined YRC within the past few weeks. Richardson and Lorensen have assumed existing positions that were being managed somewhat by committee, according to the source.
Of the three executives, Richardson may be the most coveted hire. At Con-way Freight, he built what was known as a "daily optimizer" and developed line-haul models that pulled out millions of costly empty miles from Con-way Freight's network. At XPO, Richardson's departure is keenly felt, especially given that XPO CEO Bradley S. Jacobs has put heavy emphasis on reducing Con-way's empty miles in the wake of the acquisition and ongoing integration. "He was the best operator that Con-way Freight had, and is the industry's line-haul optimization leader," said C. Thomas Barnes, president of project44, a Chicago-based logistics software concern, who worked with both Richardson and Lorensen when Barnes ran Con-way Multimodal, Con-way's former brokerage unit. Barnes said Richardson saved Con-way Freight millions of dollars in line-haul expense through the years. However, Con-way Freight's penchant for heavily discounting its rates largely neutralized Richardson's efficiency achievements, Barnes said.
Richardson's expertise, when applied to a network like YRC's which has significant room for line-haul improvement, "is a game changer" for the carrier, according to Barnes.
Richardson's and Lorensen's decisions to jump ship is also seen as a sign of renewed industry confidence in YRC's prospects, as well as respect for Darren Hawkins, YRC Freight's president, and James L. Welch, CEO of the parent, Barnes said. "Someone like Chet would not have made this move a few years ago," Barnes said.
Though not out of the woods, YRC has come a long way from the dark days of 2008-10, when it teetered several times on the verge of collapse, only to be rescued by the forbearance of its lenders and significant wage and benefit concessions from its unionized employees. Virtually all of the company's problems stemmed from persistent weakness at its long-haul LTL unit. YRC's regional unit, composed of carriers New Penn, Holland, and Reddaway, has generally performed well over the past decade.
In its third quarter, YRC Freight posted year-over-year declines in operating revenue and in total shipments and tonnage per day, compared with the 2014 quarter. Operating income rose 37.7 percent year-over-year. Operating ratio, a ratio of revenues compared with expenses and a key measure of a carrier's efficiency or lack thereof, declined to 97.9 from 99, an incrementally positive sign in that YRC Freight spent 97 cents for every $1 in revenue as opposed to 99 cents for every dollar in revenue in the 2014 quarter.
YRC Worldwide posts fourth-quarter and full-year 2015 results on Feb. 4.