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YRC ready to use ‘once-in-a-lifetime’ loan to replenish fleet

Mike

Well-Known Member
More than once on its second-quarter financial call, less-than-truckload (LTL) carrier YRC Worldwide’s (NASDAQ: YRCW) management team used the words “once in a lifetime” to describe the opportunity afforded them through a controversial $700 million Treasury loan the company received in early July.

The excitement largely centered on Tranche B of the agreement granted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act): a $400 million loan allowing it to refresh its rolling stock. Management plans to start replacing the oldest tractors and trailers across all of its separate companies first. They provided a rough savings estimate of $10,000 per tractor annually. Maintenance costs on some of the older equipment the company is operating can range from $11,000 to $12,000 a year, a far cry from the $1,000 to $2,000 spent to keep first-year tractors moving.

Management believes cost headwinds from leasing equipment versus owning amount to approximately 300 basis points. Other factors include improved fuel mileage and vehicle up time. Also, a good portion of the company’s assets don’t have the newest technology and lack sophisticated collision-avoidance features, which management believes will lower insurance expense over time.

 
All those $millions will buy YRC lots of trucks! The immediate competition has to be loving this news.
 
Hopefully they'll get twin screws this time around so their inevitable liquidation goes faster.

Nobody wants clapped out SAs.
 
“Too big to fail....”

sounds like it’s past time to let them fail.

Yep. These companies merged into a massive mega and have been a miserable failure since. In the mean time, these guys merging into this huge company has put many others out of business as a result.

This is multiple times they have been on life support and needed someone to bail them out.

This isn't a pandemic problem, it is a company being run very poorly problem.

Now, they will begin upgrading equipment.

Give it time, they will continue to run a cutthroat business that starves others out of competition, until they wear this equipment out and they will be right back in the same position again.
 
A poorly run company indeed!
They are going to use the money to update their oldest equipment. I have seen their older and newer equipment (POS) and the resale value is next to nothing.
Most companies sell at a half million miles for trucks and under ten yrs for trailers. These guys hung on too long. Sure it looked good on the books for a while but eventually there has to be negative in the books for upgrading equipment.
 
Most companies sell at a half million miles for trucks and under ten yrs for trailers. These guys hung on too long. Sure it looked good on the books for a while but eventually there has to be negative in the books for upgrading equipment.

I think they hold onto the equipment because the money isn't on the books to be able to replace it. at this point, they know someone will come along and hand them cash. They are that kid that never leaves the parent's basement and supports himself.
 
A poorly run company indeed!
They are going to use the money to update their oldest equipment. I have seen their older and newer equipment (POS) and the resale value is next to nothing.
Most companies sell at a half million miles for trucks and under ten yrs for trailers. These guys hung on too long. Sure it looked good on the books for a while but eventually there has to be negative in the books for upgrading equipment.
That's because they keep buying these single axle day cabs that are only useful to an LTL operation and all these LTL operations are buying their own junk. So there's a glut of equipment nobody wants.

There's a crapload of NEMF garbage still for sale.
 
A poorly run company indeed!
They are going to use the money to update their oldest equipment. I have seen their older and newer equipment (POS) and the resale value is next to nothing.
Most companies sell at a half million miles for trucks and under ten yrs for trailers. These guys hung on too long. Sure it looked good on the books for a while but eventually there has to be negative in the books for upgrading equipment.
Last horse I drove had 850K on the clock til I got this 579

Last trailer was 15 years old. Damn floor was rottin out from under it. Shoulda scrapped that long before they did
 

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