World Trade - November 2008 - (Page 41)

However, Jindel questions the company’s decision to retain both the Yellow and Roadway brands. “Customers are most concerned with service and consistency,” he emphasizes. “They want to see the same sales guy,” for example. Particularly today, “customers are less concerned with brand loyalty,” he explains, adding that a good customer survey would likely support his assertion. On an upbeat note, Jindel believes that undertaking bold business moves such as YRC’s in the current economic environment can often times have a positive outcome. Lovetro also sees an upside to the tough market conditions. “In times like this, it really allows you to hone your business process. Frankly, we become much better at what we do. You are really forced to improve your business and consequently the customers get a better level of service. And, because you’re running the company more efﬁciently, as business begins to build back up you’ll be making a higher contribution to revenue.” The China strategy In August, YRC Worldwide announced that YRC Logistics had successfully closed its acquisition of Shanghai Jiayu Logistics Co., Ltd., one of the largest providers of truckload and less-than-truckload ground transportation services in China. Jiayu maintains over 30,000 customers, 1,800 employees, 200 locations and a network of more than 3,000 vehicles, which makes it an ideal platform for YRC Worldwide to support the needs of both local Chinese customers and large multinational companies with transportation requirements in China. “By virtue of Jiayu’s mature network and well developed operational resources, we can help our customers to improve transportation reliability, compliance, data integrity, and visibility for their shipments in China,” said Bill Zollars, Chairman, President and CEO of YRC Worldwide. “Shanghai Jiayu Logistics represents a key link in building an end-to-end supply chain capability.” YRC Logistics acquired 65 percent of the stock of Jiayu for $44.7 million. YRC Logistics expects to purchase the remaining 35 percent interest in 2010, for an amount not to exceed $39 million, as determined by the level of Jiayu’s 2008-09 ﬁnancial performance. Jim Ritchie, President and CEO of YRC Logistics added, “Since entering into the agreement with Jiayu in December 2007, we have seen strong customer interest, and we believe the comprehensive services have a tremendous appeal to the China market and to our customers based in the U.S.” According to Lovetro, the acquisition gives YRC Logistics the third-largest ground operation in China, including 250 local offices, 400 trucks, and another 3,000 under contract as owner-operators. Of Jiayu’s 30,000 customers, 90 percent are based in China while the remaining 10 percent are multinationals based outside of China. Executives at YRC Logistics say that multinationals are beginning to search out companies that can provide service they’re more accustomed to receiving in the U.S. For instance, Chinese customers are used to dealing with less-than optimum service and pricing standards in what is still a very fragmented trucking market. In addition, because the market is largely comprised of owner-operators, it’s not unusual to drive 500 miles and return with an empty truck as it’s difﬁcult to ﬁnd a balanced trade lane they can operate in. WT For reprints of this article, please contact Cindy Williams at williamsc@bnpmedia.com or 610-436-4220 ext. 8516. 41 WWW.WORLDTRADEMAG.COM http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - November 2008

World Trade - November 2008 Contents Unexpected Responses to Unanticipated Change Reading the States of Risk in Today’s Global Economy Supply Chain Watch Tradewinds Failed Promise: Mexico and NAFTA, 15 Years Later The Short Tale Marrying Trade Finance and Transportation into a Single Transaction Trucking Gets a Double Whammy Are We Safe Yet? Logistics Resurrects the Rust Belt Keep on Compressing

World Trade - November 2008

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