Despite a spate of freight-killing winter storms and the biggest run-up in diesel fuel prices in over three years, major TL carriers are reporting strong revenues and earnings growth for the first quarter this year.
Werner Enterprises said its net income climbed 50% to $16. 2 million on 10% higher revenues of $316.4 million (not including fuel surcharges) in the first quarter this year compared to the same period in 2010.
“Freight trends … improved significantly beginning the second week of February to levels higher than 2010 and improved further in March,” the carrier noted in its quarterly earnings report. “Our Midwest freight demand was particularly strong, followed closely by most of our other domestic geographic areas, except for the West which showed less strength.”
Werner noted that average revenues per total mile increased 4.5% in first quarter 2011 compared to the same period in 2010, the result of customer contractual rate increases, freight mix improvement and unusually strong customer demand for truck capacity in the latter part of first quarter this year.
The company added that it’s “encouraged” by recently improving truckload freight trends, which it believes are caused to a greater degree by industry capacity constraints than economic recovery.
J.B. Hunt Transport Services posted record net earnings of $50.1 million on $1 billion in operating revenues in the first quarter of 2011, compared to $37.5 million in earnings on $845 million in revenues during the same period in 2010.
The transportation conglomerate noted that all four of its business segments contributed to this increase in operating revenue. Load growth jumped 15% in J.B. Hunt’s intermodal operation, helping drive a 23% increase in segment revenue, while the company’s Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS) segments increased operating revenue by 22% and 15%, respectively.
J.B. Hunt’s truckload segment revenue rose 6%, while noting that insurance and claims costs dropped during the first quarter this year versus the same period in 2010 partly due to reduced accident severity.
Heartland Express posted net income of $14.9 million on $127.7 million in operating revenues for the first quarter this year, up from $11.9 million and $115.6 million, respectively, over the same period in 2010 – though achieving such results proved difficult, the carrier noted in its quarterly report.
“The demand for freight services improved throughout the quarter. However, operating results were hindered by a combination of tight driver availability, escalating fuel prices, and an unusually harsh winter in certain operating regions,” Heartland noted.
“Fuel expense increased $9.6 million or 32.5% during the first quarter [this year] primarily due to an increase in average fuel prices,” the company said in its earnings release, pointing out that by quarter’s end on March 11, the U.S. average cost of fuel topped $3.657 per gallon, compared to $2.853 per gallon for the same period of 2010 – a 28.2% increase.
Werner Enterprises noted that diesel fuel price upswing continued well into April. While it said average diesel fuel prices were 78 cents per gallon higher in first quarter this year than the same quarter in 2010 and were 46 cents per gallon higher than in fourth quarter last year, for the first 20 days of April, prices went even higher.
By mid-April, however, Werner said the average diesel fuel price per gallon was $1.00 higher than the average diesel fuel price per gallon in the same period of 2010 and $1.11 higher than in second quarter 2010.