ODFL Reports Record-Setting 2022; CEO Transition Plan Announced
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Old Dominion Freight Line capped a record-setting year with revenue and earnings increases in the fourth quarter of 2022, the company reported Feb. 1, one day after revealing its leadership transition plan.
The Thomasville, N.C.-based less-than-truckload carrier posted net income of $323.9 million, or $2.92 a diluted share, for the three months ending Dec. 31. That compared with $278.8 million, or $2.41, during the same time the previous year. Total revenue increased 5.8%, to $1.49 billion from $1.41 billion.
ODFL noted that it reached annual records for revenue and profitability for the full year. Net income was $1.38 million, $12.18, on revenue of $6.26 billion. That compared with earnings of $1.03 million, or $8.89, on revenue of $5.26 billion in 2021.
ODFL on Jan.. 31 announced that the board of directors chose Kevin Freeman to become president and CEO effective July 1. CEO Gregg Gantt plans to retire effective June 30, but he expects to remain a member of the board.
OD announced Tuesday that Marty Freeman will succeed Greg Gantt as the Company's President and CEO, effective July 1, 2023. Freeman is a 40-year industry veteran including the last 31 years with OD. Read more: https://t.co/oYuUvPk53U. pic.twitter.com/qoJgcRMvG9 — ODFL, Inc. (@ODFL_Inc) February 1, 2023
“While we have recently announced the transition to our next president and chief executive officer, I can proudly assure you that our entire team will remain fully committed to executing the same strategic plan that has helped us produce profitable growth over the long term,” Gantt said. “There will be no change in our commitment to service, nor will we change our approach of investing in our service center network, our technology and, most importantly, our OD family of employees.”
Freeman has served as the executive vice president and chief operating officer since May 2018. He joined the company in February 1992.
“I am honored and excited to serve as Old Dominion’s next president and chief executive officer,” Freeman said Jan. 31. “We have an outstanding team at Old Dominion, and I am energized to work alongside them to chart our path forward for the benefit of our employees, customers, and shareholders. I will work tirelessly with our team to execute our long-term strategic plan, and I am confident that we can continue to build on the company’s long-term record of successful growth.”
Gantt attributed the company’s annual records for profitability to the strong finish to 2022.
“Old Dominion produced fourth-quarter financial results that allowed us to finish the year with company records for annual revenue and profitability,” Gantt said in a statement. “The results for both the quarter and the year reflect a continued focus on the consistent execution of our long-term strategic plan.
“This plan revolves around our ability to provide superior service at a fair price while also ensuring that we have sufficient capacity to support our anticipated growth.”
ODFL has been focusing on continuously improving the profitability of each customer account through yield increases that are designed to offset cost inflation and support further investments in capacity and technology. The report noted that the company delivered 99% on-time service during the quarter with a cargo claims ratio of 0.1%.
Less-than-truckload shipments during the quarter decreased 8.6% year-over-year to 2.98 million from 3.26 million. But revenue per shipment increased 16% to $489.96 from $422.28. The average length of haul decreased 1.3% to 932 miles from 944.
“Our revenue growth in the fourth quarter included a 16.7% increase in LTL revenue per hundredweight, which more than offset the decrease in LTL tons,” Gantt said. “LTL revenue per hundredweight, excluding fuel surcharges, increased 8.7% and reflects the continued execution of our long-term pricing initiatives.”
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ODFL also reported that its operating ratio improved year-over-year to 71.2 from 73.6. This measure demonstrates cost efficiency while generating revenue or sales, meaning more-efficient companies have a smaller ratio.
“The operating ratio for the fourth quarter improved 240 basis points to 71.2,” Gantt said. “We continued to operate efficiently during the quarter, despite the decline in volumes, and we also continued our diligent approach to managing our discretionary spending.
“Our salaries, wages and benefit costs as a percent of revenue improved to 44% from 46.9% in the fourth quarter of 2021, and our purchased transportation costs decreased 200 basis points to 1.9% of revenue.
Gantt added the combination of these improvements more than offset the increase in operating supplies and expenses as a percent of revenue that primarily resulted from the significant rise in the cost of diesel fuel and other petroleum-based products.
Old Dominion Freight Line ranks No. 9 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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