As many of you have seen, we recently once again wrapped up our quarterly review of performance and trends across truckload, rail and LTL carriers for Q3. In these, we summarize data from major public carriers in each mode as well as review the commentary that goes with each carrier's earnings calls (though the level of such commentary varies dramatically, from detailed to almost nothing).
Last quarter, we started looking at this data across modes on a couple of simple statistics, and do so again here for Q3, as shown below.
Q3 2013 Financial Performance of US Carriers By Mode
| |
Truckload Sector |
Rail Sector |
LTL Sector |
| Average Net Income as a Percent of Sales |
5.80% |
18.40% |
3.20% |
| Best Net Income as a Percent of Sales |
12.1%
Heartland Express |
21.9%
(Union Pacific) |
9.8%
(Old Dominion) |
| Average Operating Ratio |
89.20% |
68.50% |
93.20% |
| Best Operating Ratio |
80.1%
Heartland Express |
64.8%
(Union Pacific) |
84.1%
(Old Dominion) |
| Source: SCDigest Analysis |
As can be seen, the rail carriers simply blow the other two modes away, with average profitability of 18.4%, versus just 5.8% and 3.2% for truckload and LTL, respectively.
Ditto with operating ratios (operating expense divided by operating revenues, a key transportation industry metric), which came in on average in Q3 at an amazing 68.5% for the four public class I rail carriers, versus just 89.2% and 93.2% for truckload and LTL.
SCDigest will note that while Union Pacific led the rail pack in both these metrics, its lead over the next best was not nearly as large as the gap between Heartland in truckload and Old Dominion in LTL and their nearest performer. In operating ratio, Heartland had a 5.5 percentage point cushion over Knight Transportation, while Old Dominion had a whopping 8.4 percentage point gap over number 2 Conway Freight. Taking Old Dominion out, the average LTL OR would be more like 95% (OR averages are unweighted, by the way).
The overall financial performance gap between truckload and LTL has actually declined of late, as the beleagured less-than-truckload group has actually started to make a little bit of money for a change. But the railroad profit machine keeps on chugging.
Want more details? See US Truckload Carriers Muster Decent Q3 Result Despite Lukewarm Freight Environment, Rail Carrier Profit Machines Keep Rolling Along in Q3, and/or LTL Sector Results Continue to Improve in Q3, even as YRC Goes a Bit Wobbly Again.
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