UPS Inc. said yesterday that Jack Holmes, who ran its UPS Freight less-than-truckload (LTL) unit through some of the most difficult times in the LTL industry's history, will retire June 30.
Holmes will be succeeded by Rich McArdle, currently the parent company's mid-Atlantic district manager. Holmes joined Atlanta-based UPS in 1979, while McArdle started in 1982.
Holmes took the reins of UPS Freight in 2007, two years after it acquired LTL carrier Overnite Transportation for $1.2 billion and rebranded into the current name. When Holmes took over, all U.S. freight carriers were in the second year of what would become a brutal four- to five-year recession. The LTL industry, like virtually all others, was hit hard by the 2008-09 financial meltdown and subsequent Great Recession. To compound the sector's troubles, many carriers engaged in a destructive rate war designed to defend market share during the downturn, and in a failed effort to drive the financially tottering market leader, Overland Park, Kan.-based YRC Worldwide Inc., out of business.
UPS Freight did not initiate the savage discounting—those honors went to FedEx Freight, Memphis-based FedEx Corp.'s LTL unit, and the former Con-way Freight, which became XPO Freight Logistics last October after Greenwich-based XPO Logistics Inc. acquired Con-way Freight's parent for $3 billion. However, the UPS unit got caught up in the pricing war just the same. Since 2011, though, industry pricing has become more rational, business has improved, and a string of rate hikes by all LTL carriers has mostly stuck.
Holmes, who was unavailable to comment, has forecast that, over time, all LTL carriers will adopt a pricing model based on the density and dimensions of the freight instead of an 80-year-old formula that determines freight rates by the characteristics of commodity classes, or their "classification."
UPS includes UPS Freight's financial performance in the results of its "Freight and Supply Chain" unit, one of the parent's three operating units. It does not break out the LTL operation's results separately.
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