Exact Express^TM, our premium service introduced in mid-1998, features air and ground movement for shipments that are typically high-value products or urgently needed components. It features same-day, next-day or any-day service and a 100 percent customer satisfaction guarantee that is the strongest in the industry. The guarantee has drawn attention from consumer groups and leading industry publications. If a customer is dissatisfied with any aspect of our service, we take any action necessary, including canceling the shipping charges on the spot. However, our customers are telling us that they would rather have excellent service than a free shipment. And that’s exactly what we’re giving them. Our on-time percentage was exceptional in 1999 and the revenue run rate was slightly in excess of $80 million. Monthly shipping volume grew steadily throughout the year and into the early part of 2000. It’s a service that is truly setting new standards in our industry.

If 1999 was the year of the service portfolio for Yellow Freight, the year 2000 will be the year of service quality. We will achieve new heights in all areas of service performance during 2000. It’s a formula that works. We saw strong gains in revenue and profitability throughout 1999 in regions of the country where we improved our service performance. When our customers see real value, they have proven ready and willing to pay for it.

Regional Operations

Our regional transportation group has reached critical mass. The combined group reported revenue of $594.5 million during 1999 and combined operating income of $27.4 million.

The major event for this business group in 1999 was our July acquisition of Jevic for approximately $200 million, including assumption of debt. Jevic has proven the worth of its unique operating model. It minimizes the use of large distribution centers and emphasizes dynamic route planning utilizing a fleet of trucks and drivers who are dispatched directly to one or a series of destinations. For the partial year, Jevic contributed revenue of $137.9 million and operating income of $10.1 million for an operating ratio of 92.7.

Saia Motor Freight Line, our largest regional subsidiary, battled through weak business levels early in the year in the Texas and Gulf Coast regions. The business softness, coupled with increased wage and benefit expense and service issues, led to difficult first half comparisons. Business and service levels strengthened in the second half resulting in improved performance.