Despite high fuel costs and shocks to foodstuff freight demand caused by Hurricanes Katrina and Rita, refrigerated carriers generally are posting strong results for the third quarter.
Mondovi, WI-based refrigerated carrier Marten Transport said its net income increased 33.2% to $6.4 million on 21.6% higher revenues of $119.1 million in the third quarter compared to the same quarter in 2004. For the first nine months of 2005, net income increased 45.6% to $18 million on 22% higher operating revenues of $334.8 million compared to the same period last year.
“We continued our recent trend of increasing revenue while controlling our costs in spite of a market constrained by the number of available drivers and challenged by the high cost of fuel,” said Randolph “Randy” Marten, the carrier’s chairman and president.
“Our results were driven by a 5.5% increase in average freight revenue per tractor per week [and] we accomplished this increase in asset productivity while increasing the weighted average size of our tractor fleet by 5.5% versus the third quarter of 2004,” he noted. “Also, pricing was favorable as we increased our average freight revenue per total mile 8.9% to $1.436 from $1.319 in the third quarter last year.”
Frozen Food Express Industries (FFE) of Dallas also posted robust results. Net income increased 41.4% to $5 million on 11.7% higher revenues of $137.5 million in third quarter versus the same quarter in 2004. Profits for the first nine months of 2005 increased to $14.1 million on revenues of $382.2 million, compared to net income of $9 million on revenues of $350.2 million.
“Our performance reflected the continued favorable pricing environment and effective management of our fuel surcharge programs allowing us to offset dramatic increases in fuel costs,” said FFE chairman & CEO Stoney M. Stubbs, Jr.
“Linehaul mileage was down for the quarter due to the nature of the tasks associated with hurricane clean-up efforts, but we posted operating income gains due to strong demand for our dedicated fleet and special project services and the addition of some higher margin services to the overall revenue mix,” he added. “Our LTL operation comprised 32% of our total linehaul and dedicated freight revenue for the third quarter and it enjoyed revenue growth of 6.3% to $35.5 million.”
Despite industry-wide driver shortage, the rising cost of fuel, and maintaining a balance of capacity over its freight network, Stubbs said FFE reduced employee driver turnover by 22% as compared to the third quarter of 2004. The carrier intends to aggressively pursue additional compensation for deadhead miles while tightening its freight network.
“Regarding asset productivity and revenue growth, we are meeting with customers to review specific lane profitability enabling us to achieve targeted return on investment criteria,” he said.
“Our revenue per truck per week, which is our measure of productivity, increased 6.2% to $3,706 this quarter compared to the third quarter of 2004,” said Stubbs. “We also believe that to sustain our competitive advantage, FFE needs to continue its progress in improving equipment utilization, increase density levels inside our defined network, and using technology to tighten our freight network.”