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Logistics: Carriers, All Transportation Modes & International

Logistics News: Mixed Q2 for US Truckload Carriers, as Evolution Continues for Many

SCDigest Editorial Staff, 07-31-2013

Decent Profits in Slow Freight Environment, with Profits Up 6.2%, though Results Vary Significantly Across Carriers; Attraction to Intermodal, Dedicated and Brokerage Continues

In an volume environment many characterized as “lackluster,” public truckload carriers posted very mixed results in Q2. From an overall industry perspective, the American Trucking Associations said trucking volumes (including LTL) were up 4.3% in April year-over-year, 6.5% in May and 5.9% in June, much stronger than most of the carriers in our group reported.

For example, Swift saw a rise of just 2.1% in loaded miles in Q2, which seemed about on par with most others. It could be, however, that part of the delta between ATA tonnage figures and carrier reports might be explained by growth in dedicated carriage, which is generally reported as a different segment than straight truckload business.

And the evolution of many carriers away from straight truckload to dedicated, intermodal and brokerage services continues apace at many in the industry.

Most notable, of course, at JB Hunt, where the truckload business continued its free-fall in Q2, down more than 19% in revenue, and at a little over $100 million in sales accounts for just 7% of total revenues, down from 10% in 2012. The story is even more dramatic in terms of profits, where the truckload segment produced just 2% of total profits versus a still tiny 7% in Q2 last year.

But it isn’t only happening at Hunt, even if this is the extreme case. Straight truckload revenues fell 3.6% in Q2 at Werner, while dedicated and intermodal segments rose a combined 7.1%. The truckload business at Knight fell 2.6 in Q2, but its brokerage business soared a robust 64%, though off a small base, and now accounts for about 20% of total revenue.

In terms of pricing, the Cass Linehaul Index shows that rates, while falling versus Q1 as is typical, were consistently about 2% above 2012 levels. That would seem at the high end of the range of our carrier group, which reported modest rate increases of 1-1.5% for the most part.

Cass Truckload Linehaul Index

All told, it was a decent quarter for the TL carriers, with total revenues including fuel surcharge up 4.5%, while profits were up a decent 6.2% in aggregate, as shown in the table below.
Total Operating Rev