Less-Than-Truckload Carriers Report Strong Second Quarter
Less-than-truckload carriers report that the second quarter has been strong in terms of volumes, tonnage and revenue due to strong demand for spring and summer items and a strong oil and gas sector, based on numbers from publicly traded companies and conversations with privately-held ones.
However, some companies noted on first-quarter earnings calls that year-over-year comparisons would be somewhat skewed this year because Good Friday fell in the first quarter in 2016 and the second quarter this year.
Old Dominion Freight Line Inc. reported higher year-over-year operating metrics in all categories in May. Tonnage per day increased 5.8%, shipments per day rose 5.7% per day and the weight per shipment eked out a 0.1% gain.
In the second quarter, Old Dominion’s LTL revenue per 100 pounds of freight increased 3.5%, excluding fuel surcharges, compared with the same period last year.
The Thomasville, N.C., carrier ranks No. 11 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
“We are pleased with the growth in our LTL tons for April and May, and believe that our growth reflects an improving domestic economy,” CEO David Congdon said in a statement. “This growth in LTL tons is also attributable to the consistent execution of our long-term strategic plan, which includes delivering superior service at a fair price to our customers.”
Seaport Global Securities analyst Rhem Wood said that the results were better than his forecasts.
“Overall, [Old Dominion’s] earnings growth will be a function of service, pricing and capacity, and from that standpoint, we believe Old Dominion is positioned as well as any LTL going into a potentially improving environment in 2017 and 2018,” he wrote in a note to investors.
Saia Inc. also reported year-over-year improvements in the quarter through the end of May.
In April, tonnage per day grew 4.1% and shipments rose 5.4%. Adjusted for the shift in the Good Friday, Saia reported that tonnage increased 6.5% and shipments improved 7.7%. In May, tonnage was up 7.5% and shipments were 8.4% higher than a year ago.
The Johns Creek, Ga., carrier ranks No. 26 on the for-hire TT100.
Other less-than-truckload carriers also reported positive results in April and May, based on Transport Topics conversations with three private companies.
New England Motor Freight said that while revenue per 100 pounds of freight was flat in the first two months of the quarter, other metrics were higher versus 2016. Through May, tonnage was up 3.1%, shipments per day increased 4.2% and weight per shipment rose 1.1%. As a result, top line revenue grew 3% year-over-year through May.
“We do a lot of seasonal business, stuff associated with the spring and summer and those vendors have been stronger this quarter. The spring seasonality this year has been pretty strong,” said New England Motor Freight CEO Tom Connery. “The lawn care business was especially strong in May and in the first week of June.”
Some of the items his company hauls include barbecues, outdoor furniture, lawnmowers, lawn care and gardening products and general home improvement items.
The Elizabeth, N.J. carrier, whose parent company Shevell Group ranks No. 60 on the for-hire TT100, also attributed some growth to the ecommerce middle-mile transportation to distribution centers.
Ohio-based Dayton Freight Lines, No. 58, said that shipments, tonnage, revenue were all up double-digit percentages year-over-year through the end of May. Revenue per 100 pounds of freight was up single-digits.
“This has been a great year for us. Much better than 2016 and almost like 2014, if I had to compare,” said Dave Brady, vice president of sales. “Our customers are doing well right now and we’re also picking up some business from our competition.”
Central Freight Line, No. 94, told Transport Topics that weight per shipment rose about 3.5% to 4% year-over-year and revenue per 100 pounds of freight increased in the high single digits. However, CEO Don Orr said a comparison wouldn’t be fair on shipments per day, tonnage or revenue because his Waco, Texas company acquired Wilson Trucking this April.
“Oil and gas has been good for us, since we’re based in Texas. We transport many things that support the industry from drilling bits to wellhead completion caps. We’re a big carrier to the Permian Basin [in western Texas] where rigs are up this year,” he said. “Our replacement parts business for cars and trucks has also been good. Manufacturing, other than in California, is doing better this year than last year.”
