John Burton believes many industries today in the United States are shrinking their supply chain strategies – moving away from national manufacturing and distribution models to ones with a more regional focus.
For that reason, he says the impending spin-off of SCS from parent company Yellow Corp. positions SCS well for future growth.
As vp of Kansas City-based SCS, Burton said the company wants to build its two operating carriers, Saia Motor Freight Line and Jevic Transportation, into regional LTL powerhouses. Saia operates in 21 U.S. states, mostly in the Southeast, California and the Northwest. Jevic operates 10 facilities mainly in the Northeast, with one location in California that also provides Canadian service.
"Regional freight business is predicted to grow the most in the next 10 to 12 years," Burton told Fleet Owner. "Companies are moving their plants closer to customers and to sources of raw materials and parts to reduce transportation times. Many businesses now like to place an order and get a shipment in three days."
Following the spin-off on Sept. 3, Overland Park, KS-based Yellow's stock will continue to trade on the Nasdaq National Market under the symbol "YELL." It is anticipated that an application will be made to admit SCS common shares for trading on Nasdaq under the symbol "SCST," Yellow said.
SCS is also expected to activate $150 million in credit lines to repay in part debts owed to Yellow and for general working capital purposes. SCS posted net income of $6 million on revenues of $196 million in the second quarter, unchanged from the same period last year.