YRC to Test Hybrid Trucks in Cities

By Rip Watson, Senior Reporter

This story appears in the July 14 print edition of Transport Topics. Click here to subscribe today.

YRC Worldwide will begin testing hybrid trucks this year as part of a corporate commitment to sustainability and said it will save as much as $40 million annually by streamlining its service network to speed up transit times.

YRC will acquire as many as six hybrid straight trucks for city deliveries in the Los Angeles, Chicago, New York and Atlanta areas to evaluate their performance, said Mike Smid, chief executive officer of YRC North American Transportation. The company is still evaluating engine and transmission options in proposals from manufacturers and hasn’t yet purchased any equipment, he said.

“Sustainability is a big deal for us,” William Zollars, YRC Worldwide chief executive officer, said July 10 in Washington. “If we don’t start [focusing on sustainability], we won’t ever get there.”

Besides the testing of hybrid vehicles, Zollars cited steps to reduce fuel use such as governing all YRC trucks to run at about 63 miles an hour, setting a corporate policy against idling and continuing the company’s long-standing support of a nationwide 65 mile an hour speed limit. If that limit had been adopted five years ago, when his company and other fleets first advocated for it, the national limit would have saved 1.5 billion gallons of fuel, he said.

Zollars also pressed for a national standard for biofuels that motor carriers could use, saying that individual states’ efforts to implement alternative fuels make it more difficult on carriers with nationwide operations.

YRC’s service network has been streamlined to reduce transit times by more than one day on 15% of its shipments. The former five-day transcontinental standard is being reduced to four days.

Transit times are being upgraded between 30,000 origin/destination pairs, which account for more than half of less-than-truckload volume. The changes will cut a total of 20 million miles annually out of the Roadway and Yellow Transportation LTL network and reduce operating costs by $40 million.

“It’s an exciting time,” Smid said. “This change will make us a lot more consistent. We can offer increased predictability and more precise delivery options.”

With the service redesign and upgrade of information systems, YRC is gaining the ability to inform customers of specific shipment delivery times in a 30- or 60-minute window, Smid said.

Reducing miles traveled by 20 million, or about 1%, cuts fuel use by 3.7 million gallons annually, based on the company’s average of 5.8 miles per gallon when two trailers are being hauled.

Smid said the changes are being driven by customers who are seeking higher levels of service.

“The world is changing,” he said. “For a company that is shipping to a retailer, a delay of an hour may cost them thousands of dollars.”

To achieve the changes, 1,000 drivers were relocated. The changes began July 7 at Yellow Transportation and are set for July 14 at Roadway, Smid said.

Part of the change is being achieved by switching some freight from rail to team drivers operated by YRC’s Glen Moore truckload unit.

“Rail has been a real challenge for us,” Zollars said. “Service has deteriorated drastically. We can use that [truckload substitute service] very effectively. Rail is also more expensive.”

Zollars said the network changes will give YRC pricing flexibility that can be used either to increase profits or adjust pricing as needed. Decisions about how to use the savings will be made on a customer-by-customer basis, he said.

Market conditions remain “very competitive” Zollars said, with regard to pricing, as capacity remains plentiful.

“Things are tough out there,” he said. “The economy is soft. The economy has stabilized, but the big wild card is fuel. Fuel prices at this level could give another shock to the economy. The country isn’t built to run on $150-a-barrel oil. This company isn’t either.”

Besides evaluating hybrids and upgrading its network, Zollars said YRC expects to complete the purchase of Jaiyu Transportation, China’s second-largest trucking firm, in the next two months.

Also, YRC is testing a tracking system that would allow the company to scan a bar code at origin and be able to track freight from China to a destination in the United States.

Today, visibility of that freight often is lost from the time freight is consolidated in China until the cargo arrives at a U.S. port because there is no technology to track that type of cargo, Zollars said.