N&O changes delivery system

The News & Observer has hired a contractor to handle distribution of its newspaper, a move that will trim 17 full-time and 58 part-time positions.

Penske Logistics in mid-January will begin transporting newspapers to sites in the N&O's circulation area where carriers pick them up for delivery to homes and businesses, publisher Orage Quarles III said.

"We are making this move to serve our customers more effectively, efficiently and economically while focusing on our core business: producing relevant and compelling news and advertising information in our newspaper and on our Web sites," said Quarles, who added that the decision came after years of review.

Penske is expected to hire some drivers losing their N&O jobs, provided they meet Penske and government standards. The newspaper company will offer severance and health care continuation for those who do not land employment. Some workers have decided to retire.

The deal with Penske was the latest in a series of steps this year as The N&O and its parent, The McClatchy Co. of Sacramento, Calif., modify operations to contend with a severe slump in advertising. The N&O has cut jobs through buyouts and layoffs and trimmed sections to save on newsprint.

The Penske partnership is cost-neutral in the short term but is expected to save money in the future, said Jim Puryear, the company's vice president of circulation. The N&O, for instance, will no longer have to replace its fleet of 61 trucks.

Headquartered in Reading, Pa., Penske Logistics is a division of Penske Truck Leasing. It has several newspaper customers, including other McClatchy properties The Kansas City Star and Fresno Bee.

Puryear stressed that N&O customers will experience no interruption in service.

Penske will take over the transport of newspapers from the presses in downtown Raleigh to distribution and insert centers on Mechanical Boulevard and to the company's nine distribution centers in Wake, Durham, Johnston and Orange counties as well as drop-off sites outside those four counties.

Independent contractors who take the paper directly to readers will not be affected.