Operational improvements and rate increases boost truck carriers‘ third quarter revenue

Operational improvements, fuel surcharges and rate increases helped boost many truck carriers‘ third quarter revenue growth.

For example, ABF Freight, Con-Way, Old Dominion, Werner Enterprises and YRC all reported strong overall revenue growth. ABF Freight recorded revenue of $466.3m, an almost 14% increase over same period in 2010; Con-Way revenues totaled $1.38bn, an 8.65% increase; Old Dominion reported $494.5m, 24.9% increase; Werner $509.6m, 10% and YRC noted a 12.3% increase over last year with $1.3bn in revenue for the third quarter.

Operating income also improved for many carriers. Although YRC reported a negative operating income, the company noted $12m was due to restructuring costs and the remainder was a non-cash charge for union employee equity awards. ABF Freight was able to post strong results from a loss in 2010 and Werner noted exceptional gains in net operating income.

Operational improvements continue for carriers. According to Con-way, cost management, freight rationalization, higher asset utilization and maintaining yield growth attributed to revenue growth. Werner remained steadfast to maintain its existing fleet size of about 7,300 trucks. As such, the company plans to strengthen and re-design its truckload freight network in order to optimize and maximize freight opportunities without adding trucks. YRC’s president, Jeff Rogers, is reviewing all aspects of the company to identify opportunities to streamline and simplify operations. To begin with, in October, Rogers eliminated several vice president positions and reduced the number of geographic territories from four to two, creating an eastern and western division.

While many carriers were making operational improvements, Old Dominion was expanding its operations by opening three service centers during the quarter, increasing its total service centers to 216.

General rate increases further improved earnings for many truck carriers. Many carriers announced a 6.9% increase in rates effective in August. However, Old Dominion announced a 4.9% increase effective in September.

Of the five carriers, two noted increases in tonnage. Old Dominion reported a 9.6% increase in tonnage, whereas YRC noted an almost 5% increase. Although Werner did not report actual tonnage, the company did note there was "seasonal strengthening in demand in the latter part of August and September." Con-Way recorded monthly declines in tonnage. However, Con-way noted the declines were by design in its attempt to reduce variable expense and improve its mix of higher yield freight.

As the trucking industry enters the fourth quarter it continues to face a sluggish but improving economy. Consumer spending has been soft but remains positive. Inventory levels remain low as retailers, especially, continue to maintain lean levels. The trucking industry will probably experience an average to slightly below average quarter particularly as consumer spending remains muted. However, as the holidays approach, there may be a burst of activity, particularly within express trucking if consumer spending spikes. Even so, expect a fourth quarter much like the third.

Quelle: eyefortransport
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