Good day, and welcome to the Yalla Corporation First Quarter 2021 Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Tony Carreno, Vice President of Investor Relations.
Please go ahead.
Thank you, operator, and good afternoon, everyone. Welcome to Yellow Corporation's Q1 2021 earnings conference call. Joining us on the call today are Darren Hawkins, Chief Executive Officer Dan Olivier, Interim Chief Financial Officer And Daryl Harris, President. During this call, we may make some forward looking statements within the meaning of federal securities laws. These forward looking statements and all other statements that might be made on this call, which are not historical facts, are subject to uncertainty and a number of risks, and therefore actual results may differ materially.
The format of this call does not allow us to fully discuss all the risk factors. For a full discussion of the risk factors that could cause the results to differ, please refer to this afternoon's earnings release and our most recent SEC filings, including our Forms 10 ks and 10 Q. These items are also available on our website at myyellow.com. Additionally, please see today's release for a reconciliation of net income or loss to adjusted EBITDA. In conjunction with today's earnings release, We issued a presentation, which may be referenced during the call.
The presentation was filed in an 8 ks along with the earnings release and is available on our website. I will now turn the call over to Darren.
Thanks, Tony, and good afternoon, everyone. Thank you for joining our call. Before I get into the details of the Q1 results, I would like to congratulate Daryl for his promotion to President of Yellow Corporation. He joined the company last year as Executive Vice President of Strategic Initiatives with the primary responsibility of overseeing our enterprise Transformation. In his new role, Daryl's leadership will guide all aspects of our transformation to becoming 1 Yellow.
During his 25 year career, he has built a solid track record of success with extensive LTL experience. Prior to joining Yellow, he most recently served as Chief Executive Officer of Express Global Systems. Daryl is an inspirational leader whose experience, energy and innovative ideas will help guide The company's future. I look forward to working with him in his new role. Turning to Q1.
Severe winter weather had a significant impact on our network with the recovery lasting into March. Trucking is an outdoor that requires us to work through challenging weather and it can take a while for our expansive North American network to fully recover. One of the benefits of completing the transformation to 1 Yellow in 2022 will be the recovery time from similar weather events is expected to be much quicker. As we look ahead, the economy continues to build momentum as it recovers from the impact of the COVID-nineteen pandemic. Industrial demand and consumer optimism are contributing to tight trucking capacity and a strong yield environment.
Favorable year over year pricing trends have carried into Q2. For the month of April, the yellow companies averaged around 7% on contract negotiations. Another contributing factor to the tight trucking capacity As an industry wide shortage of qualified drivers and the need to hire more drivers, unfavorably impacted our purchased transportation expense in Q1. We have launched a nationwide recruiting drive that includes holding more than 2 dozen hiring events focused on recruiting drivers, mechanics And dockworkers. We have also expanded the number of Driver Academy locations to 17.
In addition to offering good jobs And competitive benefits, as an LTL carrier, most of our drivers can be at home with their families every night. Our most important asset is our team of nearly 30,000 freight professionals and we are working aggressively to add new members. During the Q1, we made headway on one of the largest fleet refreshes in our company's history by taking delivery of more than 1100 tractors, More than 1600 trailers and over 140 containers, most of which were added late in the quarter. These investments will have a positive impact on the age and efficiency of our fleet and should also help mitigate maintenance expense over time. For 2021, our capital expenditure guidance remains between $450,000,000 $550,000,000 Next, I would like to share what One Yellow means.
It means going to market as One Yellow brand that provides customers with choice, Simplicity, speed, visibility and reliability. Our roughly 200,000 customers will will receive one yellow invoice. Culturally, one yellow also means continuing to do the right thing for our customers and our employees. We are making steady progress towards this vision and the multi year enterprise transformation to 1 Yellow Remains on schedule for completion in the middle of 2022. This is also a critical step in aligning our cost structure with other large single brand LTL carriers.
In March, the American Rescue Plan Act 2021 was passed and signed into law. The passage is followed by a 120 day rulemaking period Finalize the application process for the pension plans. The Pension Benefit Guaranty Corporation rulemaking is expected to be completed this summer. The act will strengthen eligible multi employer pension plans that are severely underfunded and substantially mitigate their unfunded liabilities for the next 30 years. The act and the release it provides will Protect the hard earned benefits of retirees from many companies and many industries including members of the Yellow team.
I will now turn the call over to Dan, who will share additional details about the quarter.
Thank you, Darren, and good afternoon, everyone. For the Q1 of 2021, operating revenue was $1,200,000,000 compared to $1,150,000,000 in 2020. Operating loss for the Q1 was $27,600,000 which included a $1,000,000 net loss on property sales compared to operating income of $28,000,000 in the prior year, which included a $39,300,000 net gain on property sales. Excluding net gains and losses on property sales, the operating loss in the Q1 of 2021 was 20 $6,600,000 compared to a loss of $11,300,000 in the Q1 of 2020. Adjusted EBITDA for the first Quarter was $13,200,000 compared to $34,100,000 in the Q1 of 2020.
As Darren mentioned, the severe weather events during the first Quarter had a significant impact on our network. And while we always anticipate higher costs and operational impacts during the Q1, The events in mid to late February that impacted many southern states and spanned across the South Central Corridor of the U. S. Materially impacted our financial results. We estimate the operating income and adjusted EBITDA impact of those weather events to be approximately $16,000,000 Our revenue for the Q1 reflected year over year LTL tonnage per day growth of 0.5% And LTL weight per shipment was down 1.2%.
Sequential LTL tonnage per day trends compared to the prior year were as follows: January up 2.5%, February down 5.5% and March up 3.8%. On a preliminary basis, April LTL Centers per Workday was up approximately 24%. Excluding fuel surcharge, LTL revenue per 100weight was up 6.9% and LTL revenue per shipment was up 5.6% compared to the prior year. Including fuel surcharge, LTL revenue per 100weight was up 6.7% and LTL revenue per shipment was up 5.4%. Total liquidity at the end of the Q1 was $423,000,000 compared to $118,000,000 at the end of the Q1 2020.
Total capital expenditures for the Q1 were $202,000,000 compared to only $13,000,000 in the Q1 of 2020. As you heard from Darren, we still expect our 2021 capital expenditures to be in the range of $450,000,000 to $550,000,000 During the Q2, we plan on continuing our strong levels of CapEx, including the purchase of approximately 1100 tractors, 800 trailers and 400 rail containers. Now for a brief update on the U. S. Treasury loans.
First, the $300,000,000 tranche A loan. As a reminder, all $300,000,000 of the tranche loan was drawn down as of the end of 2020, and there was $26,000,000 remaining to be used. As expected, we used that $26,000,000 during the Q1 and as such, there will be no further tranche A activity. Related to the $400,000,000 tranche B loan, as of the end of the Q1, we had drawn down $251,000,000 of tranche B. And in April, we received the next $130,000,000 So as of now, we have drawn down a total of 3 $81,000,000 of the $400,000,000 total and we expect to draw the remaining $19,000,000 in the back half of twenty twenty one.
And finally, on last quarter's earnings call, we discussed the elevated purchase transportation costs Would persist and be a financial headwind through the first half of twenty twenty one. With continued strong economic demand, combined with an industry wide driver shortage, We still expect that to be true. However, we also remain confident that we are taking the prudent actions necessary to mitigate those costs, And we continue to be optimistic about our financial performance as we move forward through 2021. With that, I will turn the call over to Daryl.
Thank you, Dan, and good afternoon, everyone. I want to begin by saying how honored and proud I am to serve as President of Yellow Corporation. It's a very exciting time to be with our company, and I look forward to working alongside our 30,000 freight professionals who are committed to meeting our customers' expectations. As Darren mentioned, we are well on our way to becoming 1 Yellow. The journey began in 2019 when we aligned the sales and operational structures of our LTL brands.
This provided our customers with a single point of contact, making it easier to do business with us, while also eliminating redundancies in our network. Earlier this year, we officially renamed the holding company to Yellow Corporation in anticipation of a company wide rebrand to Yellow. And currently, we are in the process of moving all brands to one technology platform. This will streamline the flow of information for operations, sales, customer service, human resources, maintenance And in cab safety onto 1 shared technology solution. As 1 yellow, we will continue to improve our service, Get faster, create more next day lanes and offer regional service in locations we never have before.
And we'll give our customers access to all that Yellow can offer in the easiest, most efficient way possible. The integration of 1 Yellow Network will strengthen asset and network efficiencies, while providing customers with a broader network of Yellow services. When our multi year enterprise transformation is complete next year, we will go to market as 1 yellow, laser focused on meeting the needs of our customers and growing our business. In addition to the progress we are making with our enterprise transformation, We are in the process of implementing one of the largest capital expenditure plans in our company's history. It really is incredible to see the volume of Equipment that we are placing into the network in 2021.
In the Q1, we took steps to restore appropriate service levels for our customers, contributing to already elevated purchase transportation and short term rental expense. With the weather disruption behind us, We've taken firm actions to reduce purchase transportation and short term rental expense going forward. These actions include Requiring the immediate return of short term rental equipment in most locations as we gain momentum in the arrival of our new equipment. We've also bolstered hiring in locations utilizing high levels of purchase transportation due to the lack of delivery drivers. And lastly, we've made adjustments within our line haul network to minimize the impact of rising purchase transportation expense in certain lanes.
In summary, as President of Yelt! My initial priorities are very straightforward. Number 1, consistently meeting our customers' expectations. Number 2, the successful execution of our hiring and retention strategies, which will allow us to take full advantage of the strong pricing environment, while tightly managing our cost structure. And number 3, completing the enterprise transformation to 1 Yellow as planned in 2022.
In closing, I could not be more excited about our future here at Yellow. We have plenty of work to do, but we are on the right path and I fully expect us to take advantage I want to thank our 30,000 freight professionals who continue to deliver for our customers each and every day. They truly are what makes this company special, and I look forward to working alongside them on the journey to becoming One Yellow. I will now turn the call back over to Darren for some closing comments.
Thank you, Daryl. As you heard this afternoon, We are all excited about the road ahead. Despite the weather in the Q1 and the near term purchase transportation headwinds, We are encouraged by the strong yield momentum we saw at the end of March and in April. With our multiyear enterprise transformation progressing, One of the largest CapEx plans in our company's history along with tight LTL capacity, I have high expectations from our team and I remain confident that we are well positioned for 2021 and beyond. Thanks for your time this afternoon.
We would now be happy to answer any questions that you may have.
And we will now begin the question and answer session. At this time, we will pause momentarily to assemble the roster. Our first question today will come from Jack Atkins with Stephens. Please go ahead.
Great. Good afternoon and thank you for taking my questions.
Sure thing, Jack. Great to hear from you.
Well, so I guess, Darren, if we can maybe start for a moment and I guess, let's kind of think about The quarter and how it trended sequentially, obviously weather was a pretty big impact to your network in February and into early March. You made that pretty clear. You've got yield momentum there. Could you I'd like for my first question maybe focus on the Because it looked like you had some expenses that came back in a pretty material way, particularly around operating supplies and expenses and Also headcount or just salaries and wages, could you maybe talk a little bit about what drove the significant increase in those two expense buckets as we move from Q4 into the Q1 and was that pandemic related cost reduction maybe coming back into the business in preparation for A recovery in demand in 2021?
Yes, certainly, Jack. And I'll start just first of all, I'm not pleased with these Q1 results. Even when you look at excluding the property sales, the op loss in Q1 of 20 $6,000,000 versus $11,000,000 in 2020 and you put in the $16,000,000 for weather, it's essentially flat. And in this yield environment, I'm not pleased with that. However, I will say that when you think about The yield progression moving forward and I'll ask Dan to give you some revenue per 100weight including fuel surcharge metrics For each month of the quarter, just to reinforce where we're at on pricing and that also from an expense standpoint, The proper utilization of purchased transportation is key to our network.
It also allows us to run our line haul operation as needed, as Daryl mentioned And then the script to align and take great care of our customers. Now we did get into an area Well, I'm using some expensive regional purchase transportation to get the right things done for the customer, But optimizing that out is key in Q2 of moving forward without driving that expense In the wrong direction, but the proper use of purchase transportation is essential to our network. So from the expense category, That was my highest level of concern. That's why we called it out on the last earnings call, but also have been pointing our hiring events to that exact Piece of reducing our exposure to the most expensive lanes. I would like Dan to further comment.
But Dan, if you would start with the yield numbers by month for Q1 just to give everyone perspective of how we're Trending and keep in mind as Dan gives these yield numbers for Q1, my comments about April that we're still seeing strong contract renewals as Well, so Dan, take it from there.
Yes. Thanks, Darren. In my opening comments, obviously, you heard that our total yield, including fuel surcharge, was up 6.7 In our mid quarter update, we reported that in January, we were up 1.8% in February, we were up 6.3%, March, as Darren touched on, as our yield accelerated, March, we were up 11.5%. The yield clearly continues to be our if not our one of our top priorities. We're happy with the performance up to this point.
Contract renewals are averaging between 7% and 8%. We would expect that to continue. A couple of other things, Jack, on the cost items that you mentioned. First of all, the $16,000,000 weather impact that naturally kind of falls into that bucket, a lot of it in the salaries, wages and benefits And operating expenses, so that's really where a lot of that impact is. And then just one other point on that, the quarter itself, the first Quarter had 3 more working days than the 4th quarter did.
So just from a total cost perspective, that has an impact there as well. Okay.
Now that makes more sense and I appreciate that additional color. Going back to the contract rate Commentary for April, I thought that was really interesting, plus 7%. Is there any way to maybe talk about the contract renewals On average that you saw in the Q1, just to kind of compare that?
Yes, Jack. As we came through the first Quarter, they were 7% to 8%. So the contract renewals were building steam. As you know, we took our general rate increase in February this year as well. So we Started to see that benefit and those contract renewals have remained strong.
So that 7% to 8% is a good guide and they continue to accelerate as well.
Okay, okay. Understood. And then just kind of sticking with yield for a moment. If contract rate increases are up in the, Call it 7 plus percent range, which makes a lot of sense. We're hearing similar ranges from other carriers.
Are there opportunities on the accessorial side as well? Could you maybe talk about that as a potential area to drive higher revenue per shipment.
Yes, absolutely. The accessorial piece is crucial to us and all LTL But the actual recording and collection of those is something that we've become much better at in just recent times. Handheld ELDs and other devices allow us to capture that detention and since the beginning of the pandemic And also continuing into this year with what's been happening in the retail sector and explosive growth with e commerce, trailer availability has continued to be Opportunity for us and others as large customers tie those trailers up. The customers aren't doing it intentionally. They're doing it because of a lot of these disruptions that we've even seen on the trucking side with quarantines, vaccinations, Weather impacts, container shortages, all those things put together.
So we're seeing a willingness for them to pay those detention rates And then also on multiple areas of other accessorials including hazmat fees, residential deliveries, There's a much higher compliance rate than what we've seen in the past with capacity being so tight.
Okay. All right. Got it. Daryl, I guess this one's for you and congratulations on your promotion. There are obviously a lot of areas That need focus within the business.
As you sort of think about the next 12 months, what are going to be your number 1, number 2 priorities, The highest level impact initiatives that you think you can undertake to really drive improved profitability here and Capture the strength that we are seeing in the
freight market. Yes, Jack, thank you and it's a pleasure to meet
you here via
phone. Yes. To your point, I mean, as we've discussed, I'm really focused on the successful execution of our transformation plan to 1 Yellow. I mean, we're well underway, Obviously, with the component we discussed relative to our technology, but that's really the key to our future and our success and it's on track. We're going to provide our customers with easy access to both the regional and long haul services that our brands offer With one call, one truck and one driver.
And that's extremely important both for our customers and for our employees. But to your point, initial focus, as I mentioned, we've got a line of sight daily to reduction of cost and purchase Transportation expense, I mean, we have a great environment here from a yield perspective. And our focus, of course, is on the fundamentals of the business and cost controls necessary to drive the profit margins that we should have in this market.
Okay. I guess last question, I'll turn it over. When we think about your hiring efforts, Could you and I know it's still early, some you guys are putting out press releases, I think, pretty regularly. But could you just talk about What the pipeline looks like for new recruits? And when do you think that's going to start having an impact either in terms of the level of purchase transportation Vince, just overall level of profitability for the enterprise, is that something that we should start seeing in the second half of Or do you think the pipeline is building, it could impact the Q2?
Yes. Jack, I'll jump in on that one. And per Dan's comments in our prepared Script, certainly going to see the purchase transportation headwinds in the first half of the year, But we're making progress in that area as Daryl addressed. Certainly getting the PT on the right lanes and to your point about pipeline, We've got an internal pipeline that's crucial to us. And when we talk about 17 driving academies that internal pipeline is our dock workers.
So we move our The career path is you come in as a dockworker, you move into the driving academy. While you're still getting paid, you can also go the box truck route and that's where we get Conversion from dockworkerbox truck to full blown CDL Class A drivers. So we've got that target in those areas. That's why we've continued to Expand the number of driving academies. It goes beyond that with pop up academies.
If we get 3 or 4 Dock workers in one area then it makes sense for us to put the instructors there with them convert over to box truck or CDL and benefit accordingly. So that's why we're being strategic in the areas that we're putting these employees into first. So that piece, we have confidence that you're going to see improvement in Q2 around those pieces.
Okay. Thanks again for the time guys. I appreciate it.
I appreciate it, Jack. So long.
And our next question will come from Scott Group with Wolfe Research. Please go
ahead. Hey, good evening, guys. It's Rob on for Scott. Typically, from the Q1 to the Q2, we see about a 3 to 4 In light of the headwinds you guys experienced from weather in the Q1 as well as some of the Initiatives that you were just discussing, how should we think about kind of OR seasonality 1Q to 2Q this year?
Yes, Scott, this is Dan. I'll take a stab at that one. Well, we don't provide specific guidance or targets around profitability or OR, but when you talk about and think about Sequential margins, especially from 1Q to 2Q, you touched on it. Historically, we improved about 3.5 to 4 percentage points from Q1 Q2, considering the significant weather that we talked about and that's behind us now, considering that and the economic Environment that we're in and some of those actions we're taking to mitigate our purchase transportation costs, I would expect that we'd have a chance to perform at or even a little bit better than that historical trend.
Yes. And Rob, the part I like about your question is it goes into the areas that we're facing Forward on. So when we think about that, we're in the middle of one of the largest CapEx plans in our 100 year history. As you heard from Darryl, One Yellow is on track. Matter of fact, on the tech side of One Yellow, we just moved NUPEN over to the Yellow technology That went well without any customer disruption right away in Holland coming over next.
That will be done actually this year. The network side of One Yellow completes in the first half of twenty twenty two. Also on the positive news front, Our union multi employer pensions, they're good for the next 30 years with recent legislation. And our nonunion single employers, they're fully funded with no Significant contribution moving forward. You've mixed that with Dan's comments on the yield environment and the acceleration we're seeing.
That's where our confidence lies facing forward.
That's a nice segue into the pension reform. Darren, you kind of alluded that now you've got kind of full funding for decades at this point, which probably means a little bit less cost inflation. But can you walk us through kind of how this impacts Yellow's Cash flow accruals for pension expense to your rank and file As well as some of the contingent liability that we've historically seen listed in the 10 ks, our view is that this is a really a nonevent From a cash flow from an operating expense standpoint, but brings down kind of future cost inflation as well as We could potentially see that contingent withdrawal liability disclosure come down over time. But I'd be curious to get your thoughts As we're looking out to the 10 Q and ultimately a 10 ks later this year to get filed.
Rob, as usual, you've done your homework very well And your comments are right on and you've got a very good understanding of how this applies at Yellow. The first thing I would say As for our retirees and our current employees, this is very good development and allows them So the pensions that they've all worked very hard for. As you know, our pension rates are part of the collective bargaining agreement. So those are locked in For the life of our current agreement, which goes through 2024, you've already called out how this really From a financial standpoint and the way we accrue for it, but I will let Dan take that piece before I get over my skis on that subject. So Dan, fill in any there's not many blanks left, but go ahead and fill in anything that we missed.
Yes. Thanks, Darren. Look, Scott, you're right on. From a financial We expect to continue making our required contractual contributions to all of the multi employer pension plan I'd agree to in the collective bargaining agreement. However, since we've not withdrawn from any of those plans in the past, we don't carry any of that unfunded pension Liability or potential obligations on our balance sheet.
So to your point exactly, there's no immediate financial impact to us on that.
Yes. And then once we see what happens in the rule making period that I mentioned in the prepared comments, then we'll continue to update you as we move forward
And my final question before I turn it over to someone else is, you've obviously took delivery of a bunch of tractors and trailers in the Q1. I think I heard that you guys were going to be taking delivery of north of 1,000 in the second quarter. So if I could just get kind of the total number that you guys will be receiving for tractors and trailers in 2Q? And if There's any sort of difference in terms of your expected timing because of some of the supply chain issues like semiconductors that we're hearing from Hearing a lot about in the news, that would be helpful.
Rob, I'll start with the back half of your question on issues. We have not run into any at this time. The production dates we've had, the 2 OEMs we're They've done a great job in providing them and others. We did run into a few issues with some of the additional equipment that we add like electronic logging devices and others. But we got we were able to logging devices and others, but we got we were able to overcome those, so we didn't see any delays on taking delivery of the unit.
So At this point in time, we're in good shape, and we have not been impacted by chip shortages and other things that you mentioned. I'll let Dan go into the numbers side. Go ahead, Dan.
Yes. Thanks, Darren. We really started taking delivery of tractors and trailers already going back to the Q4. So when you think about I'll just give you the cumulative role here. In the Q4, we took delivery of 300 tractors, 1200 trailers.
In the Q1, 1100 tractors and 1600 trailers, as Darren had mentioned, that brings us up to 1400 tractors, 2,008 100 trailers through Q1. And then as I mentioned in Q2 or within the next 2 to 3 months, we would expect That we'd be bringing on another 1100 tractors and 800 trailers. So once we're through with that, we'll be At a total of 2,500 tractors and 3,600 trailers.
And what's the plan in terms of total tractor and
Total tractors, we're looking at between 23,200 In total trailers, probably about 3600 to 3700.
Appreciate the time, guys.
Thank you, Rob.
And our next question will come from Jeff Kauffman with Vertical Research Partners. Please go ahead.
Thank you very much. Hey, everybody.
Hello, Jeff.
Hey, I don't know that there's any questions left.
We've covered a lot of ground here, Jeff, that's for sure.
Well, let me see what I can come up with here. So you're going to bring on all this new equipment. Can you talk about how this is going to affect D And cash flow as you're bringing in higher value equipment than what you probably have on your books?
Well, certainly the oldest Equipment goes out and though we have not discussed publicly our fleet age, you can tell with These kind of numbers that Dan shared roughly 2,400 Class 8s and throw another 100 box trucks straight trucks And to give us 2,500 tractors for the year, that's going to bring the fleet age down significantly. And The fleet age when you look at it with those oldest units going out and our newest units going on the highest Mileage lanes then naturally fuel miles per gallon, uptime, maintenance expense, All of those pieces benefit over time with the warranty programs. And although our Q1 deliveries Came in late in the quarter, we should see a consistent cascade of equipment into the network over the remaining quarters in the year. So that will definitely have a very positive impact on our financials moving forward. And as we discussed, That's a big part of our plan while we're going through this transition to 1 yellow.
So Dan, anything else there that I missed
Yes. I'd just go back to the D and A part of the question, Jeff. We generally use a useful life of 15 years for both tractors and So while I don't have the specific number in front of me, you can apply our CapEx total as it pertains to that new equipment and kind of do the math on that.
Okay. Thank you. And I hate to ask the obvious question, but even if I adjust for the real estate gains this year, in the prior year. And give you credit for weather, I mean, everybody got affected by the weather this quarter. Your purchase transportation cost really wasn't up a whole lot more than most other LTL carriers this quarter.
Your labor cost came in lower. Your yields were right in line with the rest of the industry, yet your margins went down 130 basis points, whereas the rest The industry went up about 280, 300 basis points. So what do you believe was causing this Underperformance financially versus the rest of the industry, was it that your tonnage was down about 2.5%, 3% and nobody else's was? I'm just trying to understand your metrics really weren't that out of line from any other LTL company that's reported this quarter, yet your P and L
Jeff, certainly fair question. And when I made my initial comments And I spoke about cost and also the need to move to 1 yellow. The idea of having 1 of our current brands in line behind another one of our brands at a customer's location It's a difficult proposition. When you've got regional networks that can recover much quicker from winter storms, the national networks That still use a hub and spoke system, those things become glaringly apparent during stressful times like Prolonged weather events that happen in parts of the country that aren't accustomed to them. So when we put all that together, it just reinforces that Our one yellow strategy is exactly the right thing to do and the direction to go.
Our network We'll be less complex, but it'll be more agile and able to recover as we open more and more velocity centers throughout and across the country. We started this process already. You see what we did in Texas, what we've done in Richmond, What we've done in Little Rock, those are territories where we haven't had regional presence that we're providing regional service right now through YRC Freight. So just in a few quarters and by the first half of twenty twenty two, so in a few quarters, We'll have the technology piece done. Redaway, Holland, New Penn's already on the yellow technology, but all of the companies will be on one technology This year, we'll have visibility across all the line haul networks, all the terminals with one technology system for all employees to use, All drivers to benefit from and then by the first half of twenty twenty two, we'll have the networks connected In the environment that I just talked about, what we've done in Texas, Richmond, Little Rock, we've already got the regional service where we have regional carriers present, But we will remove having 2 of our company drivers at the same customer and 2 trucks, 2 trailers, etcetera.
The asset utilization side of this is going to be huge. Our cost structure does not align well right now with large Single brand LTL carriers and that's exactly what we're on a mission to fix.
So end of day, we still have And we've got these transition costs with the Systems change over and those never go as smoothly as we'd all like to believe. Is that a fair assessment?
Jeff, you did an excellent job summarizing that.
All All right. Last question. I want to go back to the yields. I mean, just an unbelievable environment for yields, not sustainable, but on the other hand, not going away anytime soon. What percentage of your 2021 contracts have been repriced at this point?
And I know you said you just took the GRI, but what's remaining to be repriced still for this year?
Yes, Jeff. This is something we've looked A lot of that, as you know, the contractual piece is so much bigger than ERI. And the contractual piece, we're pretty well balanced across quarters. So if you look at the number of negotiations we do, they're pretty evenly balanced between each quarter of the year and also the way we staff To handle that, as you know, the volume of that is thousands and thousands of customers as the majority of business now is under contract. So we've still got a lot of good pricing in front of us and those renewals are going very well.
Naturally, we're working with our customers. It's not an ambush. We're communicating ahead of time. Everyone understands the environment. It's no secret what's going on In transportation right now and these negotiations are moving in the right direction for us And also working with the customers to make sure their freight is in the right lane, so that their transportation budgets, They're all going up, but also that they can run their businesses effectively.
So we're pretty even across each quarter. All right. Thank you very much.
And we
started this and we started in Q4 in a strong way. So you could really mark us right at the halfway point. Jeff, did I lose you?
No, I'm good. Thank you. I was just passing it on. Thank you.
Okay. Thank you, Jeff.
And this will conclude our question and answer session. I'd like to turn the conference back over to management for any closing remarks.
Thank you, operator, and thanks again to everyone who participated and joined with us today. Please contact Tony With any additional questions that you may have, this concludes our call. And operator, I'm turning the call back to you.
Thank you. And this does conclude today's call. Thank you for attending today's presentation. At this time, you may now disconnect your lines and have a great day.