Subscribe to our free, weekly email newsletter!


Public LTL carriers Q2 earnings results are impressive so far

By Jeff Berman, Group News Editor
July 31, 2014

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

Some common themes among LTL’s that have issued earnings to date include: gains in tonnage, average daily shipments, weight per shipment, higher yield, and revenue per hundredweight, among others.

On top of that, LTL carriers appear to have a solid grip on pricing for their services, which has led to improvements in company operating ratios, commonly viewed as one of the most, if not the most, important metric for measuring performance. 

Revenues and operating incomes for publicly-traded LTLs:
-Con-way Freight had quarterly revenue of $940.5 million for a 5.4 annual increase, with operating income up 51.8 percent at $83.0 million;
-UPS Freight’s quarterly revenue at $771 million was up 5.5 percent; 
-ABF Freight second quarter revenue was up 9.4 percent, and operating income was up 24 percent at $22.8 million;
-Saia had a 12 percent increase in revenue to $330 million, while operating income was down slightly due to adverse claims and insurance experience; and
-Old Dominion Freight Line’s revenue was up 19.1 percent at $703.0 million, and net income was up 26.8 percent to $73.8 million

These numbers are strong overall, with not all public LTL carriers having reported second quarter earnings yet.

While higher volumes and decent pricing may serve as the primary drivers for a strong second quarter, there are other factors contributing to the quarterly success as well.

Satish Jindel, president of Pittsburgh-based SJ Consulting, told LM in a recent interview that LTL volumes are solid and seeing increases in tandem with pricing that is holding due to the fact that a good balance of LTL capacity remains tight in many cases.

“Carriers currently have a good mix of shipment and capacity balance in order to reap the profits and reinvest into the business,” Jindel said.

Another common theme among carriers in their earnings announcements was one of moving the right kind of freight, or the freight that has the highest margins. This is a firm indicator of positive industry momentum, especially considering that during the depths of the recession, most LTL’s were moving freight that, in many instances, was not profitable, to keep their networks moving.

LTL carriers like UPS Freight mentioned things like being “focused on profitable revenue opportunities” and Con-way Freight cited “revenue management initiatives that contributed to improved composition of freight in the network.

Joel Clum, president of Chicago-based freight transportation and logistics consultancy CarrierDirect, echoed this theme, explaining in an interview that on a shipment-by-shipment basis that there is freight that plays well with others but is not pricing correctly.

“We are seeing carriers with so much freight in their network now that are going back to shippers and telling them that the rates they are charging them are not conducive to their relationship, so it needs to be re-priced or we need to part ways because it is not worth it to the carrier anymore,” he said.

Stifel Nicolaus analyst David Ross said that pricing is expected to remain strong for LTLs, observing in a research note that tonnage growth remains strong through July, which will allow for a continuation of the favorable carrier pricing environment.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in November was up 3.5 percent compared to October, which was up 0.5 percent over September at 136.8 (2000=100), marking the highest SA on record.

UPS said that through this acquisition it will augment its healthcare expertise and network in Europe, specifically in the fast growing healthcare markets in Central and Eastern Europe.

Carloads were up 12.1 percent at 312,271, and intermodal at 280,337 containers and trailers saw a 4.5 percent annual gain.

Total November POLB volumes were up 2.1 percent year-over-year at 581,514 TEU, and POLA volumes in November decreased 3 percent compared to November 2013 at 663,346 TEU.

When railroads are doing business with a larger than large customer like UPS, it stands to reason, it can often be the best, and worst, of both worlds, depending on how things are going. That was one of the main takeaways from a presentation by UPS Vice President of Corporate Transportation Services Ken Buenker at this year’s RailTrends conference in New York.

Article Topics

News · LTL · Less-Than-Truckload · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA