Allied clients agree to car-hauling fee

Allied Holdings Inc., the parent company for car carrier Allied Automotive Group, said its clients have largely agreed to pay an extra “administrative processing fee” for transportation services – helping the struggling firm boost its sagging revenues. Decatur, GA-based Allied said some 85% of its clients have agreed to pay the fee, which is expected to generate an additional $40-$50 million in annual

Allied Holdings Inc., the parent company for car carrier Allied Automotive Group, said its clients have largely agreed to pay an extra “administrative processing fee” for transportation services – helping the struggling firm boost its sagging revenues.

Decatur, GA-based Allied said some 85% of its clients have agreed to pay the fee, which is expected to generate an additional $40-$50 million in annual revenues with an equivalent contribution to earnings. Allied added the fee August 6 for vehicles transported on behalf of its clients in the U.S. and Canada, resulting in an approximately 8.5% price increase, it said.

The fee comes at a time of heavy financial losses for Allied. The company recently reported that its second-quarter revenues declined 15%, resulting in a loss of $5.7 million. Through the first six months of 2001, Allied has posted losses of $24.6 million, compared to net income of $5.9 million for the same period in 2000.

Allied also narrowly avoided being de-listed from the New York Stock Exchange (NYSE), despite falling below the exchange’s listing standards of $50 million in total market capitalization. Allied worked out a deal where it would remain listed on the NYSE, subject to quarterly monitoring, as long as it gets over the $50-million mark by November 29, 2002.

“Our increased rate structure is an important and positive step in the ongoing renewal of Allied Holdings,” said Hugh E. Sawyer, Allied’s president & CEO. “We will continue to aggressively execute the remaining elements of our turnaround plan in order to establish a more stable operating platform in 2002.”

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish