Marten Transport, CSX Profits Rise 5%; Lower Fuel Prices Aid Both in 2nd Qtr.

Marten Transport Ltd. and CSX Corp. last week kicked off the reporting season for second-quarter earnings with each posting 5% growth in profits.

Marten, a refrigerated carrier based in Mondovi, Wisconsin, raised net income to $8.36 million, or 25 cents per share, helped by an expansion of its dedicated fleet operations. That gain compares with $7.9 million, or 24 cents, in the same quarter a year ago.

Revenue fell 3% to $163.6 million from $168.4 million, because of a $13 million drop in fuel surcharge collections. Excluding the fuel factor, revenue rose 6.1% to $143.9 million.

“We believe the demand for our customized dedicated transportation solutions will continue to result in further growth,” CEO Randolph Marten said in a July 14 announcement that noted a 68% increase in revenue from dedicated freight to $25.4 million and a 25% increase in brokerage revenue to $16.4 million.

CSX, the third-largest U.S. railroad, increased net income to $553 million, or 56 cents per share, capitalizing on a 5% rise in intermodal shipments and cost controls.

The railroad, based in Jacksonville, Florida, lowered its costs by $200 million, which resulted in the improvement from last year’s second-quarter earnings of $529 million, or 53 cents. Revenue fell 6% to $3.06 billion.

CSX moved 723,000 intermodal loads, which represented 41% of total shipments, producing revenue of $450 million. Total shipments fell 1%, hurt by 11% less coal hauled and a 6% drop in agricultural products.

“We have the resources in place to meet customer demand across the network, supporting improved performance and operational efficiency,” CEO Michael Ward said on a conference call. “That efficiency, coupled with lower fuel prices, helped decrease expenses by 9%.”

The first two earnings reports will be followed over the next weeks by dozens of freight operators spanning the truckload, less-than-truckload, logistics, trucking supplier and railroad industries.

Marten noted that 201 tractors were added to support dedicated business, with 279 more slated for addition during the third quarter to handle freight already under contract.

The operating ratio at Marten, which ranks No. 48 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, was 90.2, improving from 90.5 in last year’s second quarter.

While Marten’s dedicated and brokerage business improved, revenue from truck-rail freight was down 27% and the truckload revenue, excluding dedicated, fell 9.9%.

At CSX, the increased intermodal loads resulted completely from a 9% increase in domestic truck-rail freight, which was attributed to conversions from all-highway moves, as well as increased volume from additional customers. International freight, accounting for 44% of the intermodal shipment total, fell 1% because of contract losses that outpaced increased shipments after the contract dispute at West Coast ports was resolved.

Chief Commercial Officer Clarence Gooden said the railroad has been successful in regaining domestic shipments from truckers that were lost last year because of rail shipping delays.

He remained optimistic about intermodal growth over the next two or three years because there has been no reduction in highway congestion that hurts truckers, the driver shortage is continuing and future regulations could squeeze trucking capacity.

The operating ratio at the railroad dropped to 66.8 from 69.3.

“Relatively lower network demand, driven by mediocre volume in the quarter, likely contributed to CSX’s ability to improve on all three performance metrics,” Credit Suisse analyst Allison Landry said in an investor note, citing a 5% improvement in train speed and a 3% drop in terminal waiting time for shipments.

On-time departures improved 10 percentage points to 66% and on-time train arrivals were 48%, up six percentage points from the 2014 quarter.

CSX earnings were helped by 2 cents per share because of an accounting change and a real estate gain, said a report from Robert W. Baird analyst Benjamin Hartford.