Schneider Income Down as It Shutters Its First to Final Mile Service
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Schneider National Inc. reported lower net income and revenue for its second quarter, as it announced the closure of its First to Final Mile service after disappointing performance.
For the quarter ended June 30, Schneider reported net income of $34.5 million, down 48% from $65.8 million in the second quarter of 2018.
Earnings per share were 19 cents per share, down 49% from 37 cents per share a year earlier.
Revenue for the Green Bay, Wis.-based company was down 2%, to $1.21 billion from $1.24 billion a year earlier.
“Compared to second quarter of 2018, operating earnings were negatively impacted by First to Final Mile, and by muted seasonality in 2019, which affected all operations,” CEO Mark Rourke said in an Aug. 1 earnings release. “As we look to the second half of the year, we expect industry capacity levels to rationalize given the challenges of the current operating environment. Our focus will be to improve our asset utilization and our overall cost position across our truckload and intermodal platforms.”
Rourke
Rourke said the First to Final Mile segment will be shut down over time, and employees will be moved within the company. The segment had been operating for three years, Rourke said, and had 26 U.S. terminals in the United States.
The troubled division serviced business-to-business and business-to-consumer movements for freight such as furniture, carpets and appliances, according to an official.
Schneider said they will honor in-transit freight contracts and deliver the remaining loads.
The carrier reported truckload revenues decreased 6% compared with the same quarter in 2018.
Revenue per truck per week decreased $257, or 7%, compared with the second quarter of 2018.
Price was modestly positive compared with the same quarter in 2018, the company reported. But that benefit was more than offset by reduced productivity that resulted from lower seasonal volumes, dedicated account start-ups and the delivery of more replacement tractors during the quarter than were sold, the company said.
Truckload income from operations decreased 87% compared with the same quarter in 2018.
Schneider ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 16 on the TT Top 50 list of the largest logistics companies in North America.
