Roadrunner Accelerates Restructuring Plan Amid Pandemic
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Roadrunner Transportation Systems was in the final steps in a multiyear financial turnaround effort when the coronavirus pandemic hit, forcing the company to confront the same economic challenges facing all of trucking while also seeing its plans through, a company executive said.
“What happened over the last couple of months has kind of accelerated our plans,” said Roadrunner Freight President Frank Hurst during an interview with Transport Topics. “We sat down right when this happened as a management team and asked, ‘What are the short-term decisions that we need to make to ensure that we remain healthy during this period?’ ”
Roadrunner decided to advance plans already in place for a corporate restructuring that would help it focus on the business segments it deemed core to its future, all part of its longer-term recovery plan, he noted.
Hurst
“We announced internally on April 20 that the Roadrunner portfolio will separate into two operating divisions, the one being Ascent [Global Logistics] and the other being Roadrunner Freight,” Hurst said. “Those two business units began reporting directly to our executive chairman on the board of directors. With that we are dissolving Roadrunner Transportation Systems, which is the corporate function.”
He added, “When we announced in April, that’s when we began the process of dissolving our corporate functions. The head positions at that time, like our CEO, CIO, head of HR and so forth, they departed the business at that point.”
Hurst added that while corporate positions from areas such as finance and information technology also were eliminated, in other cases roles were restructured. “We also embedded other positions that were necessary into the business units,” he said. “I think at the end of the day it’s going to make Roadrunner Freight a lot more productive and nimble.”
These efforts followed a string of moves Downers Grove, Ill.-based Roadrunner has made to streamline its business. It sold its intermodal group in November 2019, divested its flatbed unit the next month, and sold its Prime Distribution segment in March.
“In August of 2019, we made a comment that we were narrowing our strategic focus to our LTL and logistics segments,” Hurst said. “We were going to narrow our focus on those two groups.”
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With that work completed, Hurst believes his division is poised for a turnaround.
“What we’ve been doing over the last three years is we’ve been going back to our roots,” Hurst said. “I’ve been public and said that over time Roadrunner Freight had lost its way. We said this has been a service-based recovery. We’ve gone back to make sure we’re a driver-centric organization and really focused in on service and quality overall.”
Hurst added that the company is now pivoting toward growth; it is investing in two new facilities — including a northeastern region hub opening this year in Philadelphia — and is growing its fleet.
He said the company saw strong revenue in May, is rebuilding relationships with former customers while working to retain existing ones, and has added more than 100 drivers while also experiencing the lowest driver turnover it has seen in years.
“People have been saying for a long time that Roadrunner Freight was going to go out of business,” Hurst said. “We just really kept our heads down and focused on improving the network and improving services. What’s really exciting for us is seeing all that hard work we have done over the last three years.”
Roadrunner Transportation Systems Inc. ranks No. 17 on the Transport Topics Top 100 list of largest for-hire carriers in North America.
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