A diverse spread of trucking companies—from truckload to LTL and seemingly of all sizes and lengths of haul—reported seeing profits and rates expand in the quarter ended June 30. However, some saw utilization drop due to the driver shortage and hours-of-service constraints.
Con-way Inc. reported 2Q net income increased 11% to $74.1 million.
“Over the past eight months we conducted a detailed, strategic review of our customer base to bring LTL yields more in line with our premium service offerings,” stated Douglas W. Stotlar, Con-way's president and CEO. “We've been successful in this effort, as yields have improved while balanced against modest growth.”
Stotlar noted that the business environment for LTL freight, while competitive, continued to support “rational pricing.”
Con-way’s trucking operations consist of Con-way Freight, a regional LTL operation, and Con-way Transportation, which consists of the company's truckload, expedited, brokerage and trailer manufacturing divisions.
Swift Transportation Co., Inc., a large truckload carrier, reported its net earnings were $45.5 million, a whopping 53% more compared to $29.8 million in 2Q 2005. Excluding fuel surcharge revenue, net revenue of $686.2 million decreased 3.2% over the second quarter of 2005. The decrease in revenue excluding fuel surcharge was primarily due to the reduction in the average linehaul tractors by 1,426 from the second quarter of 2005 to the second quarter of 2006, with the majority of this decrease occurring in the last two quarters of 2005.
Revenue per loaded mile increased 3.8% to $1.6262 in the second quarter of 2006 from $1.5660 in the second quarter of 2005. The company's operating ratio of 90.2% was an improvement of 270 basis points over 2Q 2005.
Landstar System, Inc., a non-asset transportation and logistics provider, saw profits rise 32% to $29.5 million. Landstar has benefited greatly from lucrative hurricane disaster-related contracts with the federal government. The quarter included approximately $21 million of revenue from transportation services provided under a contract between Landstar Express America and the U.S. Dept. of Transportation/Federal Aviation Administration.
Marten Transport, a transporter of temperature-sensitive freight, reported its net income jumped 11.5% to $7.5 million in 2Q 2006 compared with the same quarter last year.
“Our results for the quarter reflect an operating environment characterized by normal seasonal freight demand, limited industry equipment capacity, high fuel prices, intense competition for qualified drivers, and shippers that are willing to pay good rates for access to equipment and high levels of service,” said chairman & president Randolph L. Marten.
Marten added that the fleet’s average freight revenue per total mile increased 6.3% to $1.472 from $1.385. “Our largest challenge continues to be the ability to find qualified, safe, and experienced drivers.
“Our operating ratio was 91.0% for the second quarter of 2006 compared with 89.8% for the second quarter of 2005,” Marten said.
For quarter ended June 30, short- to medium-haul truckload carrier Knight Transportation Inc. said net income increased 21.2%, to $18.1 million from $15.0 million for the same period of 2005.
“Our operating ratio was 78.7%, a 60-basis-point improvement over the second quarter of 2005. Revenue growth continued during the quarter and was driven by a combination of fleet expansion and increased revenue per mile,” stated chairman & CEO Kevin P. Knight.
“We believe recruiting and retaining qualified drivers remains our industry's most significant issue,” Knight continued. “The lack of qualified drivers had a negative impact on seating our growth tractors in the quarter. The decrease in utilization is also attributed to the new hours of service regulations and our use of advanced technology to manage compliance.
Knight believes that “tight driver capacity and little capacity growth…will continue to offer an environment for rate increases to offset the additional costs.”
Medium-haul dry van truckload carrier USA Truck said its profits increased a modest 0.6% to a record $4.4 million.
“Although freight demand for the full quarter was not as robust as a year ago, freight demand steadily improved throughout the quarter from a very soft environment in April to a strong one in June,” stated Robert M. Powell, USA Truck chairman & CEO. “Our operating ratio was 94.6% in April, 90.3% in May and 87.8% in June.”
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