Publicly-traded Q3 LTL carrier results are solid so far

As was the case for the second quarter, third quarter earnings results for publicly-traded less-than-truckload (LTL) carriers are again strong.

Signs of solid earnings results from carriers that have posted earnings to date include tonnage increases, gains in weight per shipment and average daily shipments, higher yield, and revenue per hundredweight.

And on top of that, LTL’s continue to show they are in control when it comes to pricing, too, due in part to increasing demand, which, in turn, has aided in pricing momentum to a large degree.  As previously reported, most LTL carriers are routinely seeking and getting 3 percent to 4 percent increases on some lanes of contract traffic.

With pricing in their favor, LTLs have seen subsequent gains in their operating ratios, which are viewed as one of the most important metrics for over all performance.

Revenues and operating incomes for publicly-traded LTLs:
-Con-way Freight had quarterly revenue of $946.3 million for a 5.3 annual increase, with operating income up 39.4 percent at $71.9 million;
-UPS Freight’s quarterly revenue at $810 million was up 7.9 percent; 
-Saia had a 13.5 percent increase in revenue to $332.5 million, while operating income rose 19.2 percent to $27.1 million; and
-Old Dominion Freight Line’s revenue was up 20.6 percent at $743.6 million, and net income was up 29.5 percent to $77.9 million

Industry stakeholders have noted 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,” SJ Consulting President Satish Jindel said in an interview earlier this year.

A prevalent theme among public LTL carriers in earnings announcements for the last several quarters centered around 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.