Mr. John Schulz

GLG News by Mr. John Schulz, Independent Analyst - Contributing Editor

GLG News is now G+ Insights

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Someday, Somebody is Going to Be Right About Capacity

March 10, 2009

Analysis of:Averitt Expands Into Four New States | www.logisticsmgmt.com

Trucking company Averitt Express, a regional LTL carrier with a truckload unit, is expanding its truckload services into three Midwestern states and New Jersey. The move comes amid double-digit capacity reductions at truckload giants J.B. Hunt, Werner Enterprises and Knight Transportation, among other truckload carriers.

One Company, Yes, But Will It Be Profitable?

March 6, 2009

Analysis of:Yellow and Roadway Now One Company | www.joc.com

YRC Worldwide says it has fully integrated the operations of long-haul national units Roadway Express and Yellow Transportation. The move comes five years after YRC bought Roadway for $1.1 billion. It also comes after YRC has lost a reported $1.612 billion in the last two years as the nation's largest trucking company by volume struggles with sales, operations and efficiency in the economic downturn.

If Landstar is Down, What Does That Mean for Everybody Else?

March 3, 2009

Analysis of:Landstar System Reports FOurth Quarter Earnings Per Share of 47 Cents | www.google.com

  Landstar's earnings were shaved by nearly $5 million in the fourth quarter of 2008, although its full-year earnings were still $110.9 million, compared with $109.7 million for full-year 2007. Quite an accomplishment in a down-market year.   Although Landstar CEO Henry Gerkens admits the company was "significantly impacted" by the fourth-quarter economic slowdown, its non-asset-based business model continued to generate "significant cash flow and outstanding returns."

The Diesel Fuel Lottery: You Try and Predict Your Company's Costs

February 27, 2009

Analysis of:Carriers, Shippers Share Roller Coaster Diesel Fuel Ride | www.logisticsmgmt.com

 Diesel fuel prices peaked at $4.767 per gallon last July 14, a 69 percent increase from prices a year earlier. Then they plunged to $1.838 on Jan 26. Since then, they have hovered around th2 $2.20 range.   A top trucking industry executive, Old Dominion Freight Line President and CEO David Congdon, calls any attempt at forecasting fuel "a total crapshoot."   How the trucking industry, and its customers, are coping with the vagaries and whims of the world crude oil market is the subject of this lengthy analysis.

The Dominio Theory of Trucking: Which Large Truckload Carrier Failure is Next?

February 19, 2009

Analysis of:Consolidation Expected as Truckload Rates Continue Down | www.supplychaindaily.com

Demand for dry van truckload freight services is evaporating and that means a shakeout of the $670 million truckload sector is looming. A recent survey of truckload carriers showed that 21 percent of carriers were considering liquidating their trucks and other assets in the next six months. What will that mean for overall industry capacity and how will that affect surviving carriers' rates?

YRC Worldwide Isn't the Only Trucking Company on a Fiscal Diet

February 17, 2009

Analysis of:LTL News: FedEx Freight to Eliminate 900 Positions | www.logisticsmgmt.com

FedEx Freight, the largest non-union LTL carrier, is shedding 900 positions due to slack freight demand by its customer base. The cutback represents 2.6 percent of FEF's 35,000 employees. These layoffs follow an additional 500 positions eliminated last December.

Got Excess Trucking Capacity? Here's Why

February 13, 2009

Analysis of:DOT: Biggest Freight Fall Since '01 | www.trafficworld.com

 Freight movements in December were at their lowest levels since 2000, according to statistics released by the Department of Transportation's Bureau of Transportation Statistics.  That DOT index fell 2.3 percent in December, which was the fourth decline in five months. It's the largest five-month decline in freight shipments since mid-2000, the federal government said.

Is Ex-Sen. Robert Dole's Vision of an Ethanol Plant in Every County Now a Pipe Dream?

February 12, 2009

Analysis of:Ethanol, Just Recently a Savior, is Struggling | www.nytimes.com

A front page story in the New York Times declares that the ethanol industry in the U.S., once a vibrant dream of an alternative domestically produced motor fuel, is struggling. Plants are closing, the industry is struggling with overcapacity and even government lawmakers who demanded a certain percentage of our fuel come from ethanol, are making a hasty retreat. Is ethanol dead?

Bi g Brown Still Earns a Little Green in Q4

February 5, 2009

Analysis of:UPS Reports 4Q Income is Up but Total Revenue is Down 5.2 Percent | money.aol.com

  UPS's fourth-quarter net profit of $254 million on $12.7 billion revenue is a sign of how deep the recession has bitten. To make matters worse, UPS officials are indicating--although without the precise forward-looking guidance that UPS used to provide--that things will likely be worse in the first quarter of 2009.   UPS's small gain is most likely mostly attributed to the announced exit of DHL from the U.S. small package domestic market. That exit occurred Jan. 31. Although UPS still technically has a two-year, $10 billion deal to provide airlift service for DHL Express to airports within North America, many analysts are doubting that deal will ever reach that level.

YRC's Two-Year Loss Total Now $1.612 Billion. Is This All of It?

February 2, 2009

Analysis of:YRC Worldwide's Quarterly Losses Exceed Expectations | pd.kansascity.com

  YRC Worldwide's latest quarterly loss--$244.41 million in the fourth quarter--takes its two-year total losses for 2007 and 2008 to $1.612 billion. Now, to be fair, that figure includes some one-time charges for writeoffs in goodwill and other special charges.   The largest trucking company by volume in the U.S. suffered fourth-quarter losses that were, in the words of respected trucking analyst David Ross of Stifel Nicolaus, "worse than we thought."   That is fairly amazing considering YRC has already lost more than 85 percent of its stock value in the past 52 weeks, is close to being in violation of its debt covenants and already has extracted a 10 percent wage cut from its 45,000 Teamster-covered employees.

If Con-way is Losing Money, What is Everybody Else Going to Post?

January 29, 2009

Analysis of:Con-way Reports Q4 Loss | www.google.com

  Con-way, the highly diversified and usually very profitable trucking and logistics company, posted an unprecedented fourth-quarter loss of $49.7 million on $1.13 million revenue in the fourth quarter of 2008. That compares with a year-ago quarterly gain of $36.9 million in the fourth quarter of 2007.   True, if you exclude one-time charges, earnings from Con-way's continuing operations was $4.5 million. But that again pales from the usual $50 million to $70 million quarterly earnings that Con-way shareholders usually enjoy every quarter.   Con-way has diversified in truckload (buying the former Contract Freighters Inc. for $750 million two years ago) and has a logistics unit in Menlo Logistics.

Look Out Below! U.S. Truck Tonnage Off 11.1 Percent in December

January 26, 2009

Analysis of:ATA Truck Index Plummeted 11.1 Percent in December | www.ttnews.com

  U.S. trucking companies are facing the roughest operating environment perhaps since deregulation in 1980. The American Trucking Associations' seasonally adjusted truck tonnage index for December was off 11.1 percent, its largest month-to-month reduction since April 1994. That drop occurred when the Teamsters struck a handful of LTL companies.   December's drop was the third-largest single-month drop since ATA began collecting this data in 1973.   Compared with December 2007, the index declined 14.1 percent. That's the biggest year-over-year decrease since February 1996. During the fourth quarter of 2008, tonnage was off 6 percent compared with the fourth quarter of 2007.

The Ship is Listing, Customers are Fleeing but, Wait, You Have to See This Nifty Logo

January 26, 2009

Analysis of:Roadway, Yellow to Sport New Logo | www.printthis.clickability.com

  YRC Worldwide, as part of its merging of long-haul LTL units Roadway and Express and Yellow Transportation, is rolling out a new logo that simply reads "YRC." It contains the familiar swamp holly orange color of Yellow and the royal blue that Roadway used. The former Yellow Corp. bought Roadway in 2003 for $1.1 billion to create YRC Worldwide, and is part of the reason YRC is now struggling under the weight of more than $2 billion in long-term debt.

It's Absolutely, Positively A Marketing Gem

January 15, 2009

Analysis of:FedEx Speeds Up Freight Service | www.commercialappeal.com

  FedEx Freight, the largest non-union LTL carrier in the country, is offering a new, time-definite service that closely resembles the type of premium services long associated with FedEx Express, the small-package unit of FedEx Corp.   For an extra $75 per shipment, shippers can have the peace of mind knowing their shipment will be guaranteed to be delivered by 10:30 in the morning.    It's unclear how many competitors will follow the move, but usually the likes of UPS copy any type of service improvement that innovative FedEx begins.

If YRC Worldwide Fails, You Can't Blame the Teamsters.

January 9, 2009

Analysis of:Teamsters Freight Members Ratify YRCW Job Security Plan | www.teamster.org

By a 77-to-23 percent margin, Teamsters rank and file at the YRC Worldwide member companies have approved a 10 percent wage giveback that is expected to save the company between $220 million and $250 million annually. It actually will save the company more than that going forward because it also suspends all cost-of-living raises-- which were supposed to be around 3.5 percent annually--through the end of the contract in 2013. Pension contributions are unchanged, which is of prime importance to the Teamsters.

If You Don't Believe It's Bad Out There, Read This

January 7, 2009

Analysis of: Recession Creates a Load of Problems for Truckers | www.latimes.com

  Record-high fuel prices helped chase more than 170,000 trucks off the market in the first three quarters of this year. The Owner-Operator Independent Driver Association estimates there are 100,000 fewer owner-operators plying their trade now than a year ago. Has the capacity-demand equation hit equilibrium yet, or is there still significant overcapacity in the market?

Will YRC Make It? Here's One Vote That Says "Yes."

January 7, 2009

Analysis of:Will Teamster Givebacks Be Enough to Save YRC? | www.dcvelocity.com

  The Teamsters' concession to give back 10 percent of its wages, and freeze all wages through 2013, is all but official. It is expected to save the $9 billion trucking concern at least $220 million a year.   While LTL competitors are eager to paint YRC as a dying company, YRC may have more staying power than many expect.

"Atrocious, Awful, Dreadful, Horrible, Really Nasty, Ugly." Yep. That was 2008 in Transports.

January 5, 2009

Analysis of:Shippers Sailed Through Rough Seas in 2008 | www.forbes.com

  Freight demand is notoriously cyclical and the trucking, rail and ocean industries are coming off their worst year in more than two decades. The Dow Jones Transportation Index was off by 25 percent of the year. That only looks good when one considers the entire Dow and S&P 500 indexes were off a whopping 39 percent for the year. When does the recovery in transports begin? Or has it already?

Happy New Year! IRS Changing Tax Credits for Alcohol Fuels

January 2, 2009

Analysis of:Calculation of Volume of Alcohol for Fuel Credits; Denaturants | www.irs.gov

 Changes in the way the Internal Revenue Service relating to the volume of denaturants related to the fuel use of alcohol and alcohol fuel mixtures are coming, courtesy of changes in the Food, Conservation, and Energy Act of 2008.  This will affect alcohol producers, transportation and other industries that use alcohol as a fuel in their businesses, companies that sell alcohol at retail for delivery into vehicles and producers of alcohol fuel mixtures that sell or use the mixture in their day-to-day operations.

The Looks Good on the Surface, But Actually is Bad News for Trucking

December 24, 2008

Analysis of:ATA Truck Tonnage Index Rose 1.7 Percent in November | www.truckline.com

 The November seasonally adjusted truck index rose 1.7 percent in November. That's the first month-to-month improvement since June of 2008.   But because the index contracted by 6. 3 percent from June through October, the slight rise in November is actually quite depressing news. In October of this year, that index was at its lowest level in five years.   So the trucking recession rolls on, promising to carry on into 2009.

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