can you shed some light on what is influencing pricing from your company’s perspective?
O’Kane: I think what is going on and entering into our decision-making now is that we are relatively at capacity and at some terminals overcapacity, but we are in a situation where we are buying tractors and trailers and hiring drivers so our cost point has shifted between variable and fixed costs pretty radically as a result. With a couple of those dynamics in buying tractors, for example, where we have 140 tractors on order that cost about 16 percent more than similar tractors did in 2006. For trailer prices, we are finding that with steel prices and tire prices, we are going to pay 25 percent-to-30 percent more but don’t have an exact comparison [to previous prices for trailers] because our spec has changed with some additional value items.

LM: What about the costs related to filling trucks with drivers?
O’Kane: The biggest driver is the cost of labor which is difficult. On a regular basis, we are running our own driver academy in which we train dock and warehouse staff to become professional truck drivers. Each driver that we produce out of that school, almost without exception, is a great employee, but it is cost of north of $20,000 per trained driver that we experience in that process. And at the same time wages have been tightening and drifting in an upward direction. We never reduced driver wages in 2008 or 2009 when many other carriers did. We granted an increase in 2010 and again this month. There is going to be continual pressure on driver wages, because during the deepest of the recession, the labor pool left the LTL sector and our sense is there are a lot of people that don’t care to come back into it so our sense is that wages will continue to play a very big role going forward, with driver wages putting continued pressure on rates going forward.

LM: What are some of the related impacts of that trend?
O’Kane: Some of the truckload guys are kind of curtailing capacity, because they are chasing drivers. We at least have the opportunity of providing preferable employment in many ways for many of their drivers, with things like regularly-scheduled on-home time.

LM: Is another benefit of this on the LTL side the ability to more easily flex up or down your network as demand indicates?
O’Kane: Yes. Drivers are the limiting factor right now. It used to be that we would talk about terminal doors being the limiting factor. Going forward, the limiting factor, when it comes to rates, is going to be the ability to recruit or develop and retain quality drivers.

Source: http://www.logisticsmgmt.com/article/equipment_and_driver_expenses_are_moving_ltl_rates_up_says_a._duie_pyles_ok/

The Associated Press

8/4/2010

NEW YORK — Shares of trucking company YRC Worldwide Inc. fell Tuesday as investors worried over the challenges ahead, despite its report of a much narrower second-quarter loss.

The stock dropped 19.4 percent, or 8 cents, to 33 cents in afternoon trading. The stock has traded as low as 10 cents and as high as $6.18 in the past year.

The company, based in Overland, Kan., posted a loss of $9.5 million, or a penny per share, compared with a year-ago loss of $309 million, or $5.20 per share.

Revenue fell to $1.12 billion from $1.23 billion a year ago.

Analysts surveyed by Thomson Reuters expected a loss of 8 cents per share with revenue of $1.19 billion. The estimates typically exclude items.

At YRC’s national unit, shipments per day were down 18.6 percent. They were up 11 percent compared with the first quarter.

YRC’s regional unit reported shipments fell 3.1 percent from a year earlier, but leaped 13.8 percent from the seasonally weak first quarter. The company said the sequential volume growth pressured its liquidity.

Longbow Research analyst Lee Klaskow said he thinks “management is showing signs of progress that will help YRC return to profitability.” But he recommends investors “stay on the sidelines” because the company is still struggling. He said there is still a chance the company will be forced into filing for bankruptcy, as it nearly was late last year, but Klaskow noted he thinks the company has enough support to survive.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

The Associated Press

8/2/2010

THOMASVILLE, N.C. — Old Dominion Freight Line Inc. said it approved a 3-for-2 stock split for shareholders as of Aug. 9.

Shareholders will get certificates for the new shares, and instead of partial shares they will get cash based on the average of the high and low sales prices on the record date.

After the split, Old Dominion will have 55.9 million shares outstanding. It’s the fourth 3-for-2 split in slightly more than seven years. The company said the split will improve trading volume of its stock.

“We are pleased to declare this three-for-two stock split, which is our fourth three-for-two split in just over seven years. In making this decision, our Board of Directors considered our industry-leading financial performance together with our prospects for continued growth,” said David S. Congdon, president and CEO of Old Dominion. “This action, which we expect will improve the market liquidity and trading volume of our stock, reflects our board’s confidence in our ability to drive long-term value for Old Dominion’s shareholders.”

The shares rose 63 cents to $40.06 in morning trading.

The Trucker Staff

8/2/2010

WASHINGTON — The weekly retail on-highway diesel price was up $0.009 today, a small increase but the third consecutive week that the price has risen. The average today was $2.928 per gallon for the U.S. and was up $0.378 from one year ago.

The only region that saw a decline was New England (-$0.005) to $3.009 per gallon.

The least expensive price was found in the Gulf Coast region at $2.887 per gallon which was up $0.012 a gallon from last week.

The West Coast was highest at $3.071 per gallon, while California, which is not part of any region, topped all prices at $3.132 per gallon.

A three week comparison of prices may be found here.

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