DG:
I wanted to begin by maybe giving a little bit of history. How would
you describe the state of the industry? More specifically, would you
look back to position trucking in 2000 and then what has happened during
2001? How has Yellow done from then until now?
JW:
I would be glad to address that. Certainly the year 2000 was one where
we enjoyed a pretty hot economy actually. Although by the fourth quarter,
we were starting to see things slow down somewhat. We knew the economy
was slowing down well before it was in vogue from Wall Street or the
Government to say that the 
recession
was looming on the horizon. We actually could tell in the fourth quarter
that things were slowing down. But during the year 2000 overall, the
economy was good, the capacity in our industry was pretty tight and
so that allowed us to have actually a pretty stable pricing environment
in place. And so 2000, for most carriers, was really one of the best
years that our industry had experienced in a long time.
And then how quickly we’re sitting here in March of 2002 saying,
“Wow, what happened in 2001”, and I guess I would describe
the state of the industry as we speak as “very challenging”.
I guess those are the two words I would use. Certainly the economy really
fell off the table starting in March of last year and certainly the
911 events didn’t help and actually further exasperated the economic
conditions that our industry was facing. So, 2001 was pretty much just
the opposite of 2000 from an economic standpoint.
Anytime that there is a slowing economy in our industry, capacity increases.
In other words, there are more partial trailers running, there are more
carriers looking for market share; and so what generally happens, pricing
comes more into play and that’s really what we saw happening as
the year went along is that some carriers started pricing more aggressively
to get that market share.
DG: In fact, as I’m thinking,
it seemed to me that 2000, I think, was the best year you had ever had.
JW:
Right.
DG: I don’t know exactly how
2001 ended up, but I wonder if we should begin to look at where we are
now or what your thought projections are, if you have any thoughts in
that regard.
JW:
Yeah, I think we’re starting to see a little up tick in business
levels and I think that is an initial sign that the economy is starting
to come back. But our industry has really suffered this year. And in
fact, a long-standing company, APA in the Northeast, went out of business;
Dick Simon Truckload carrier is in Chapter 11, one of our major competitors
is definitely showing a lot of red. But you know we’re starting
to see some signs that business levels are picking up and hopefully
that will stabilize the industry somewhat and not cause further pricing
deterioration.
DG: One of the things you’ve
been doing is taking an aggressive attitude in a tough tough marketplace.
And I think it relates to this next question that I’m really interested
in from you. You’ve changed your name from Yellow Freight System
to Yellow Transportation, Inc. Can you give us the background as to
how and why this has come about and what the benefits are to the shipper
community?
JW:
We just see it as a continuing evolution of our company. If you go back
and look at the ‘30’s when Yellow was in its early stages,
we were called Yellow Transit. Then in 1963 we changed our name to Yellow
Freight System. And now if you really look at what we’re trying
to offer in the marketplace, we’re a much different company than
the Yellow Freight System title that we have in our name. Our standard
ground service that has been in place since our origin is still our
mainstay, but we’ve really worked hard on expanding our service
portfolio. Exact Express, Definite Delivery, our global offering, exhibit
services, NAFTA, specialized delivery services. If you really look at
what’s in our service portfolio, we just thought freight was a
limiting name.
We do so much more than just work with freight everyday from our standpoint,
that we felt like we wanted to be able to expand that out. Plus we didn’t
want some of our competition like Fed Ex, who has now entered the freight
business from an LTL standpoint, to be able to say freight is just one
of the things that they do and that’s all Yellow Freight does is
freight. So we did it for several reasons, but we were really feeling
like we wanted to change our name so that our customers view us as a
total transportation, total solutions provider versus just a freight
company.
DG: That is interesting because
anymore the bigger you are the more boutiques who can come after you
on the one hand, and then the big huge organizations that just keep
on buying everything up, make for very worthy competitors as well, I
guess.
JW:
Right.
DG: As a leader among leaders in
our industry and certainly we look at Yellow in that regard, what is
your vision for the future? Both short term and then long term too?
Where do you see Yellow in terms of your position in the pack? Or in
fact do you see yourself ahead of the rest? And if so, what is the primary
differentiator?
JW:
Good question. We consider ourselves certainly one of the leaders and
we also acknowledge that there are some awfully good competitors out
there that we’re on the land with everyday to compete with. But
I guess one of the things that I’m most proud of is to see what
Yellow has done during a year that was tough like 2001 to position us
for the future.
We continued to reduce transit times in 2001, we expanded our regional
service in a big way in a year when most companies who deal with expedited
business saw their revenue shrink, we actually grew our Exact Express.
As we discussed earlier, we really had to work hard on reducing our
cost structure. We won a lot of awards for an improved Web site, so
Yellow is not sitting still. I guess that’s the main message I’d
want to put forth and whether economy is going good or whether the economy
is a little bit slow, we’re not varying from our game plan to change
our company to meet the needs of our customers short term or long term.
So, you know, when you really think about what our future is like,
some of it depends on the economy, some of it depends on if there is
additional failures and/or consolidation in the industry. And those
are things that certainly we have to be weary of, but we’re going
to continue to try to expand our portfolio of services and certainly
be viewed as a cost competitive carrier with great service. We think
some of the differences between us and some of our competitors is the
fact that we can not only take a shipment from Bowling Green, Kentucky
to Scranton, Pennsylvania in two days which is as good as anybody can
do, but we can also take that shipment from Bowling Green to Portland,
Oregon, which is something that a lot of people can’t do. So we’re
going to continue to work on our long haul business, our regional business,
our expedited business, our international business and we think we’re
well positioned for the future.
More...
