LTLs Post Lower Results During Challenging 4Q
Less-than-truckload carriers remained profitable during the fourth quarter but had a tougher time operating compared with earlier periods in 2015 as well as the final quarter of 2014, recent earnings statements show.
ArcBest Corp. earned $4.9 million, or 19 cents a share, down from $14.5 million, or 53 cents, during the 2014 fourth quarter. Revenue dipped to $648.1 million from $664.8 million.
In its Feb. 3 report, Fort Smith, Arkansas-based ArcBest said results reflected “a soft freight environment associated with high customer inventory levels and weakness in the manufacturing and industrial sectors of the economy.”
ArcBest’s ABF Freight LTL carrier is the corporation’s largest division and more than twice the size of the four smaller subsidiaries combined. ABF, No. 7 on the Transport Topics LTL sector list, saw its quarterly operating ratio — expenses as a percentage of revenue — deteriorate to 98.3 from 97 during the previous year’s final quarter.
Number of shipments, tonnage hauled and revenue declined during ABF’s fourth quarter.
The company also said CEO Judy McReynolds will add the position of chairwoman of the board of directors after the ArcBest annual meeting in the spring. McReynolds, 53, has been with the company for 18 years and was chief financial officer before becoming CEO. She also is chairwoman of the American Transportation Research Institute’s board of directors.
McReynolds succeeds Robert Young III as chairman. He has worked for the carrier since 1964, and his father assembled ArcBest through acquisitions starting in 1951.
For the full year, ArcBest earned $44.9 million, or $1.67 a share, on revenue of $2.67 billion. That compared with $46.2 million, or $1.69, on revenue of $2.61 billion in 2014.
Overall, ArcBest ranks No. 12 on the Transport Topics Top 100 list of for-hire carriers in the United States and Canada.
Old Dominion Freight Line posted gains in revenue and net income for both the fourth quarter and all of 2015.
The Thomasville, North Carolina-based company reported Feb. 4 that it earned $72.2 million, or 85 cents a share, on quarterly revenue of $734.6 million. During the same time in 2014, ODFL earned $69.9 million, or 81 cents, on revenue of $721 million.
Old Dominion ranks No. 11 on the for-hire TT100 and fourth on the LTL list.
CEO David Congdon said generating “solid financial results” was challenging and that they came about “despite a soft economic environment and strong comparable results for the fourth quarter of 2014. We believe we gained market share during the fourth quarter based on increases in both shipments and tonnage.”
The company’s operating ratio, expenses as a percentage of revenue, deteriorated modestly to 84.5 from 84.4 in the previous year’s quarter.
For the year, ODFL earned $304.7 million, or $3.57 a share, on revenue of $2.97 billion. That compares with $267.5 million, or $3.10, on revenue of $2.79 billion the year before.
YRC Worldwide results returned to a loss for the quarter, but not the year.
The company said Feb. 4 it lost $23.5 million, or 73 cents a share, on quarterly revenue of $1.14 billion. In the year-earlier period, YRC earned $6.2 million, or 16 cents, on revenue of $1.22 billion.
YRC’s regional group was profitable, but the longhaul division posted a loss for the quarter.
For the year, YRC earned $700,000 on revenue of $4.83 billion.
Two carriers with substantial LTL divisions — UPS Inc. and Roadrunner Transportation Systems — also reported difficulties in the sector.
UPS said UPS Freight, which is the fifth-largest LTL on the TT list, posted fourth-quarter declines in revenue, number of shipments and tonnage hauled. But pricing, as measured by LTL revenue per hundredweight, did grow by 2.1% for the quarter.
Management said Feb. 2 that it “continues to focus on profitable revenue in a challenging market environment.” Total revenue for UPS Freight was $2.88 billion for the year, down from $3.05 billion in 2014. The company does not report on profitability by sector.
Roadrunner said that, for its LTL division, fourth-quarter revenue declined to $118.4 million from $140.9 million in the same 2014 quarter.
Quarterly operating ratio deteriorated to 99 from 98 year-over-year, and there were declines in total tonnage and number of shipments. However, the company did report improvements in freight rates before fuel surcharges.
Fuel surcharge revenue during the fourth quarter has been down throughout trucking, reflecting the ongoing plunge in diesel prices.
