Schneider Q4 Profit Rises 19% on Improved OR, Cowan Deal

Schneider announced at the end of November it was acquiring Cowan Systems for $390 million. (Schneider)

[Stay on top of transportation news: Get TTNews in your inbox.]

A 19% gain in fourth-quarter profits at Schneider was propelled by the boost its dedicated operations received from the carrier’s acquisition of Cowan Systems, as well as improvements in its operating ratios.

Schneider on Jan. 30 reported net income of $32.6 million in Q4, or 18 cents per diluted share, compared with $27.4 million, or 15 cents, in the year-ago period.

The carrier’s overall operating ratio improved to 96.8 from 97.7, with its intermodal division posting an operating ratio of 93.8, compared with 97.6 in the same period 12 months earlier.

Operating ratio provides insight on how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.

Schneider announced it was acquiring Cowan Systems in a $390 million deal at the end of November.

“Bringing Cowan Systems into our family of companies aligns with our long-term strategic vision to provide customer-centric dedicated solutions as the cornerstone of our truckload segment and broaden our presence to provide greater value to our customers,” Schneider CEO Mark Rourke said when the deal was announced.

Schneider’s Q4 overall truckload revenue also received a lift from organic business growth in the dedicated segment along with a higher rate per total mile across its truckload network operations. This was partially offset by lower network volumes.

Revenue per truck per week for the whole truckload division averaged $4,100, an increase of 1% compared with $4,057 in the same quarter in 2023, with both network and dedicated revenue per truck improving.

The decrease in network volumes came on the back of a 13% decrease in truck count to an average of 3,745 from 4,301 a year earlier.

Overall, the truckload division posted an operating ratio of 96.5 in Q4, compared with 96.6% a year earlier. For 2024 as a whole, the division posted a 95.9 OR, compared with 92.1 in 2023.

Schneider Q4 earnings report

Despite the short stint, Cowan slotting into Schneider’s truckload unit helped boost Q4 revenue. The division posted Q4 revenue of $560.1 million, a gain of 2% or $9.4 million from $550.7 million in the year-ago period.

With Cowan in the fold, Rourke reminded analysts how fast Schneider had transformed its fleet; dedicated tractors accounted for 33% of its truckload fleet in 2017 compared with 70% as 2025 began. With the deal, Schneider’s dedicated fleet now tops 8,400 tractors.

Schneider CFO Darrell Campbell during a Jan. 30 conference call said he expects a broader recovery in the freight market in the year ahead, including the truckload sector, similar to forecasts from analysts and his counterparts across the trucking industry.

“We anticipate continued improvement in freight market conditions in 2025, leading to revenue and earnings growth with enhanced margins and asset returns progressing throughout the year,” he said. “For our Dedicated business, we anticipate top-line and earnings growth from organic new business and the accretive impact of Cowan Systems, including expected acquisition synergies.”

During the call, Rourke noted that the Cowan deal would broaden Schneider’s “vertical reach” and enable a geographic expansion. Cowan’s dedicated operations focus on specialty retail, food and beverage customers and the construction industry, he said, adding that synergies would be realized as early as the first quarter of 2025 and accelerate as the year progresses.

Baltimore-based Cowan will retain its branding and leadership.

Schneider’s intermodal unit in Q4 posted a 380 basis-point improvement in its OR, helped to boost revenue in the most recent quarter by 6% or $15.6 million year over year to $276.2 million from $260.6 million. Rourke noted it was the second consecutive quarter of year-over-year earnings growth for the unit, which also saw volume grow 3% to 109,906 orders from 106,377 orders in the year-ago period.

The division is likewise expected to have an even better 2025, said Campbell. “For Intermodal, we expect both volume growth and price improvement by leveraging our differentiated market position and rail partnerships,” he said.

Green Bay, Wis.-based Schneider ranks No. 9 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, with a fleet of 10,600 tractors.

Cowan, No. 63 on the for-hire TT100, operated nearly 2,400 tractors before the deal went through.

The Cowan deal was Schneider’s third dedicated acquisition in as many years. The deal followed the 2022 and 2023 takeovers of Midwest Logistics Systems and M&M Transport Services.

The coming year will be a positive one in other respects, Schneider’s top executive said during the call. Q4 played out as expected, with trucking companies still not being “adequately compensated,” Rourke said, and as a result, carriers were exiting the market.

However, customers have been much more equitable to increased prices since the turn of the year, even though it is very early in the freight allocation cycle, he said.

Schneider will also benefit from an improvement in truck revenue per week, Rourke said, as a result of the delayed signing of contracts and an internal tightening of its truck-to-driver ratio.