June 1, 2006
For this edition of On the Record, Mike Smid, CEO and President of Roadway, shares his observations about the changes that Roadway has made in their network, and his thoughts on what is happening in the LTL marketplace. Mike is a veteran of the industry and has had a distinguished career within YRC Worldwide. He has a keen appreciation for what is happening in the marketplace. I was very interested in Mike's comments.
In our recent Executive Briefings we have noted that the carriers are making significant changes in their businesses to respond to the competitive challenges. Some shippers have taken advantage of these changes to achieve cost savings; conversely, shippers who haven't paid attention to these changes may have seen their LTL costs go up.
In listening to this interview, we trust that you'll get good insights into what is happening with Roadway. More importantly, you may want to ask/challenge yourself and consider what changes will other carriers be making as they head into the future? In the wake of last week's announcement about FedEx's purchase of Watkins, the rumor mill is filled with all sorts of pending acquisitions. We don't put too much stock in rumors, but we do believe that there will be more acquisitions and carriers will continue to make the changes that are necessary to maximize the efficiency and the value of their networks.
After we completed the interview with Mike we continued our discussion, but unfortunately, my recorder was full so we couldn't tape the comments. When Mike shared his prognosis of the LTL Sector for the Fourth Quarter, 2006 and 2007, it was obvious that the pricing aberration in the LTL sector that we've seen over the past nine months is coming to an end, and we will once again be experiencing a "sellers' market." Suffice it to say, this has implications for shippers. This is why we continue to encourage shippers to seriously consider the timing of their bidding process. In case you're interested, even though historically the fourth quarter has been the worst quarter for shippers to be bidding freight, we see more shippers than you could imagine taking their freight to market in the fourth quarter. I guess they don't mind paying higher rates.
One final note, in the interest of full disclosure, we have had a strong working relationship with Roadway for several years. We have a tremendous amount of respect for the company and the job they do for their customers.
When we invite our resources to go On the Record, we highlight the fact that the purpose of these sessions is to give our listeners a better understanding of the marketplace. Mike did an outstanding job in meeting this criteria, so I invite you to pull up a chair and listen in as we go On the Record with Mike Smid.
Mike Regan
TranzAct Technologies
Send Mike an e-mail
