Roadrunner Announces Plans to Downsize its Dry Van Business (9/30/19)
DOWNERS GROVE, Ill.--(BUSINESS WIRE)--Roadrunner Transportation Systems, Inc. (“Roadrunner” or the “company”) (NYSE: RRTS), a leading asset-right transportation and asset-light logistics service provider, today announced it will downsize its unprofitable dry van business, which is part of the company’s Truckload segment.
The downsizing includes reducing dry van company tractor and trailer fleets by over 50%, closing five terminal locations and eliminating approximately 450 positions. Employees subject to the workforce reduction will receive either severance or a 60-day notice. In conjunction with the downsizing activities, the company expects to incur one-time pretax operations restructuring costs of between $12 million and $16 million, excluding the gain or loss on the sale of equipment and the write-down of assets.
The downsizing activities are expected to reduce lease obligations and debt and be substantially complete by year-end 2019, with workforce reductions effective over the next 60 to 90 days. The reduction in force represents approximately 10% of the company’s total workforce.
“The decision to downsize the dry van business is a significant step in executing our strategy to emphasize our value-added logistics and asset-light LTL segments and increase our returns on invested capital. We factored in the impact of this downsizing as part of the strategic review of our Truckload segment. We believe downsizing the dry van business will improve operating margins and cash flow, reduce lease obligations and debt, improve internal controls and allow greater focus on the significant value-creation opportunities within our other businesses,” said Curt Stoelting, Chief Executive Officer of Roadrunner.
About Roadrunner Transportation Systems, Inc.
Roadrunner Transportation Systems is a leading asset-right transportation and asset-light logistics provider offering a full suite of services and solutions under the Roadrunner®, Active On-Demand® and Ascent Global Logistics® brands. The Roadrunner brand offers less-than-truckload, over-the-road truckload and intermodal services. Active On-Demand offers premium mission critical air and ground logistics solutions. Ascent Global Logistics offers domestic freight management, retail consolidation, international freight forwarding and customs brokerage. For more information, please visit Roadrunner’s websites, www.rrts.com and www.ascentgl.com. https://www.businesswire.com/news/home/20190930005775/en/Roadrunner-Announces-Plans-Downsize-Dry-Van-Business/?feedref=JjAwJuNHiystnCoBq_hl-fqXyBvmekC3Xq1G1wQ7hjMFbZM1ntlKeK-8bUzJqFSVSfe41V1BKA-b6v2ZVrSSNs-dUYKiDvY7XniNSqv88QcY1Ge_vf9QIMZ4alzIf_0HlyE0C4hZhHVlTvKnn0d0vQ==