Many Fleets Report Gains on Higher Rates, Volumes

Eight of nine publicly traded trucking fleets reporting quarterly earnings last week achieved improved results, relying on either higher rates or volume increases, or both.

Five of six truckload carriers increased profits, led by earnings that more than doubled at Celadon Group to $5.7 million. Knight Transportation Inc.’s net income rose 47% to $14.4 million, excluding a stock-related charge, followed by 31% growth at Landstar System Inc. to $26.8 million and 24% growth at Universal Truckload Services Inc. to $3.6 million.

Also in the truckload sector, P.A.M. Transportation Inc. reversed a year-earlier loss and posted a profit of $674,193, and Covenant Transportation Group Inc. narrowed its loss to $640,000.

“Driver shortages and high equipment costs continue to constrain [truckload] industry capacity, creating opportunities for well-capitalized carriers with good service offerings and growing fleets,” Dahlman Rose & Co. analyst Jason Seidl said in an April 26 report.

On the less-than-truckload side, Old Dominion Freight Line Inc. raised net income 44% to $31.1 million, but Vitran Corp.’s loss widened to $5.82 million from $224,000. In addition, UPS Freight, which doesn’t disclose LTL profitability, “broke even” in the quarter (see story, above).

Ryder System Inc. raised net income 35% to $34.9 million, helped by stronger leasing and used truck sales.

Celadon relied on an 8% increase in its driver corps to raise revenue 10.5% to $153.2 million while also raising rates per loaded mile by 2.7%.

Celadon President Paul Will said four acquisitions boosted the driver fleet “at a time when capacity is exiting the industry.”

“Successfully sourcing and retaining drivers will be critical in our ability to continue to grow our asset-based businesses,” Knight CEO Kevin Knight said in an April 25 statement. During the quarter, his company posted a 10% increase in revenue per tractor and a 4% increase in the tractor fleet. Revenue rose 18% to $219.5 million.

“Overall, available truckload capacity continues to lag demand, leading to continued strength in industry pricing,” Landstar CEO Henry Gerkens said in a statement.

His company raised overall revenue to $649 million, relying on a 15% increase in trucking revenue that included 9% higher volume and 6% higher rates per load.

Covenant raised revenue per loaded mile by 6.1%, helping to offset a 2.4% decrease in miles run because the tractor fleet shrank by 3.3%. CEO David Parker said in a statement that “during the quarter, freight demand was reasonably good, and customers continued to express concern about accessing adequate truckload capacity.”

Covenant’s revenue rose 0.4% to $157 million, the smallest revenue growth of any carrier reporting last week.

At smaller truckload fleets, both Universal and P.A.M. re-ported higher revenue per load. Revenue climbed 12% at Universal to $175.8 million, reflecting a 13% in revenue per truckload move. P.A.M.’s revenue rose to 13% to $96.5 million.

Old Dominion’s revenue growth was 18%, to $497.1 million, which incorporated 5.5% higher revenue per 100 pounds of freight, a 9.5% increase in shipments, as well as heavier shipments and increased length of haul.

CEO David Congdon said the improvement resulted from market share gains.

UPS Freight raised revenue 2.3% to $618 million, including a 4.5% rise in revenue per 100 pounds of freight and a 2.3% decline in shipments.

Vitran also increased revenue, climbing 12% to $207.7 million, but that $22.4 million increase was swamped by a $28.3 million rise in expenses as LTL shipments rose 11%. While its LTL business lost money, its supply chain unit was profitable.

Ryder, which relies on fleet management services, such as truck rental and leasing, for about two-thirds of its revenue, said that unit’s pretax profit rose 20% to $50.7 million on revenue of $1.07 billion. The supply chain business improved its pretax profit by 8%.