From SCDigest's On-Target E-Magazine
- August 18, 2015-
Supply Chain News: US LTL Carriers have Rare Strong Quarter in Q2
Profits Up 20% over 2014 in Continued Strong Rate Environment
SCDigest Editorial Staff
In what is a rarity, US less-than-truckload (LTL) carriers posted generally strong results across the board for Q2, following a pretty strong Q1 as well, while Old Dominion once again separated itself from the pack.
SCDigest Says: |
 All told, profits for the group were $220 million, up from $91.6 million in Q1 and 20% from Q2 2014. |
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We're back as usual every quarter with our review of the results and trends across freight modes. We started with US truckload carriers carriers, which enjoyed a generally positive Q2. (See US Truckload Carriers Enjoy Generally Strong Q2, Finally Starting to Add Trucks.)
Last week, we covered the US rail sector, which in a sense struggled based on sharply declining volumes of coal shipments, but still managed to be highly profitable. (See Rail Carriers have Somewhat Tough Q2, but Still Highly Profitable.)
This week, it's time for a look at the LTL sector and the five public
carriers we follow. We'll note that does not include two of the largest
LTL providers - UPS and FedEx - because neither UPS nor FedEx breaks out
their numbers in a way that allows the LTL portion to be isolated out
from other freight business such as truckload carriage (FedEx) and
supply chain services (UPS).
All told, it was a mixed freight environment, with three of the five carriers reporting tonnage was down in Q2 - though most of those commenting that was often the result about being choosier about which customers and shipments to accept. As usual, the major exception was Old Dominion, which went strongly the other way, with tonnage gains of 9.1%. Maybe all the other carriers simply lost market share to the seemingly invincible Old Dominion.
But a strong rate environment partially made up for that. Revenue per hundredweight excluding fuel surcharges was up a very strong 6.4% at YRC Worldwide's Freight unit, for example, and 5.2% at its Regional unit. The same measure was up a little more than 5% at both Old Dominion and Conway Freight as well, with ArcBest noting "continued positive trends in account pricing," in its LTL segment.
All told, profits for the group were $220 million, up from $91.6 million in Q1 and 20% from Q2 2014.
The unweighted operating ratio, or operating expense divided by operating revenue, a key transport sector metric, fell to just 90.8% across the group, down from 92.1% in 2014 and the lowest number in a long time.
Of course, that OR perfomance was as usual led by Old Dominion, with an operating ratio of 81.5%, down another percentage point from 2014. Excluding Old Dominion, the average OR from the group was 93.1.
You'll find all that data and more in the table below.
LTL Sector Q2 2015 Operating Results
Source: SCDigest
(Transportation Management Article Continued Below)
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