YRC Worldwide, Inc. (YRCW)

I am a driver for yellow.

The industry is moving to three "vertical integration" companies.

UPS, FedEx and Yellow.

Yellow is under the radar. They bought Roadway and USF Redaway. DHL provided 14% of the money for Redaway.

They have short changed capitol expenditures (fleet purchases)in the past but are now lowering the average age of their fleet.

They took a big hit when BNSF announced that they were getting out of providing trailers for free. In the past we could go to the rail yard and pick up a trailer, fill it up and then send it across the country. Then we had three days to unload it.

So they had to buy a lot of trailers to use on the rail.

On other issue is the cost of fuel. The big companies have "fuel surcharges" to recover the increase in cost.

Owner-operators can't charge more and have to "eat" the increase.

I've talked to a few that are getting out of the the business. One man told me fuel was $1.00 a mile and that he was going home and parking his rig.

The end of the year has always been the time to layoff in this traditional cyclical industry.

Our Teamster contract states that a person laid off will not get holiday pay if they don't work in the last 15 days. Dec 10 is the traditional day for layoffs. The company can save $500k to $1M in holiday pay.

After the layoff every one else works overtime to make of for the loss in manpower. After Jan 2 laid off workers will be called back on a "as needed" basis. In Mar or Apr everyone will be back at work.(on overtime).

I don't understand who might buy YRCW.

UPS is still digesting its LTL purchases.
FedEx tried to go for market share by lowering its rates. They got spanked.

The only downside I see for Yellow is from my personal viewpoint.

Management thinks that freight moving across the dock is where revenue comes from (more bills per hour - more revenue.)

I believe this is a false assumption. Revenue comes in when the customer signs the Bill. More bills signed - more revenue.

If we could get the dock to slow down a little bit then we could get the drivers to deliver more freight.

Yellow is big enough to use economies of scale.

Example: A Yellow driver can deliver freight to 15 customers in a ten block area. Most other companies are happy if their driver delivers 15 bills in a ten mile area.

Yellow can have its drives deliver more freight in a smaller area, making more then one run.

But because of the bill count across the dock, the dock just shoves freight into a trailer and shuts the door.

As a driver, there are many times I've waited in line to use a customer dock because there were two or three Yellow drives ahead of me.

I own this stock and I think its way under value. It can't fall much more.

I believe Yellow is a good company. It could be a Great company.