Truckload carrier Cannon Express of Springdale, AR, said losses grew sharply in its fourth fiscal quarter and for its fiscal year, which ended June 30, 2001.
Cannon said revenues for its fourth fiscal quarter of 2001 were $21.8 million vs. $25 million compared to the same quarter in 2000. Net losses jumped for its fourth fiscal quarter to $4.18 million vs. $145,183 in the fourth fiscal quarter of 2000. Revenues for Cannon’s fiscal 2001 were $85.7 million versus $91.7 million in its 2000 fiscal year. Net losses for its 2001 fiscal year reached $7.3 million vs. $520,501 net income in fiscal 2000.
The carrier said its revenue declined due to a shortage of qualified drivers to operate its trucks during the quarter and for the year, along with a softening market for its services. Rising fuel prices also hurt the carrier, with Cannon’s average cost per gallon for fuel some 18 cents higher than in fiscal 2000. For fiscal 2001, the company said its fleet consumed approximately 13.8-million gallons of fuel at a cost of approximately $20 million -- an increase of $6.6 million in fuel costs compared to fiscal 1999 and an increase of $2.4 million compared to fiscal 2000.
Although Cannon said its contracts include a surcharge for higher fuel costs, it has not been able to fully offset the higher cost of fuel through fuel surcharges due to stiff competition for freight. The carrier also said there can be no assurance that future increases in fuel costs will be passed through to customers, so future fuel cost increases or fuel shortages could affect future profitability.