Dive Brief:
- Yellow is nearing completion of the first phase of its network reconfiguration to optimize terminals in the Western U.S. CEO Darren D. Hawkins said during a Sept. 8 conference presentation that the carrier planned to finish the optimization of 89 YRC Freight and Reddaway terminals “in a little more than a week from now.”
- The optimization will eliminate overlapping routes in the western U.S., part of a national plan to reduce costs and bring the carrier’s brands under one name.
- The company plans to finish the remaining two optimization phases this year, ushering in a One Yellow plan to operate as a “super-regional carrier in 2023," Hawkins said.
Dive Insight:
Yellow’s route optimization is part of the carrier’s bid to consolidate its four LTL brands — YRC Freight, Reddaway, New Penn and Holland — along with Yellow Logistics. The company has already consolidated its sales teams and technology platform as part of the unification plan.
“Once optimization is complete, efficiencies are gained through improved asset utilization and lower overall miles,” the company noted in a Q3 investor presentation.
Yellow has been eliminating overlapping routes in the western U.S., the first phase of the network reconfiguration, Hawkins said.
The first phase of the plan seeks more efficient service in over 4,600 zip codes, according to Yellow. Phase two, affecting about half of the company’s terminals, will focus on operations in the Midwest and Northeast, and phase three will be centered in the Southeast and Central U.S.
“We are nearing the finish line of an enterprise-wide transformation that began in 2019,” Hawkins said at the online conference.
He added that lessons learned from the first phase will inform the second and third phases.
The result of the blended brands, the company noted in its annual report, “will be to operate as one Yellow company, one Yellow network, under one Yellow brand that provides great super-regional service.”
Other delivery providers are also launching overhauls to cut costs and boost service. FedEx is addressing overlap and inefficiencies across its business segments with its Network 2.0 plan. The company said in June it’s spending $2 billion on the plan to save $2 billion annually by fiscal year 2027.
