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BigGuy
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I was a financial adviser for a dozen years through 2002. I earned my CPA a decade before that.
  • YRCW Logistics Mismanagement 0 comments
    Aug 3, 2014 2:15 PM | about stocks: YRCW

    Over the past two years, as YRCW has slowly turned around, YRCW has continually purchased transportation to make good on deliveries. Sometimes its because of the weather, but most of the time its because the network was, in the words of CEO James Welch, on the past 3 earnings conference calls, "out of cycle".

    That may explain things being off once a year, but YRCW has been "out of cycle" 3 quarters out of every 4 for the past 3 years. Out of cycle means the trucks or the drivers or the goods are in the wrong place at the wrong time instead of being in the right place at the right time.

    Having the right drivers and trucks and trailers and goods in the right place at the right time most nearly all the time happens more than it used to happen. Very cheap computing and messaging power has enabled far more efficient and effective logistics. Logistics is the responsibility of management, not the drivers, not the people loading and unloading the trucks, and not the people maintaining the trucks and trailers.

    Management has not been managing logistics well at all. Tens of millions of dollars are spent every quarter because trucks and trailers and drivers and goods are not in the right place at the right time. In the first half of 2014, YRCW refinanced its debt and extended a give back labor contract for five years. Lets hope that in the second half of 2014, management can attend to and resolve continuing logistics problems and NOT have purchase transportation at top dollar rates to make good on promised deliveries.

    Disclosure: The author is long YRCW.

    Stocks: YRCW
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