From SCDigest's On-Target E-Magazine
- May 29, 2013 -
Logistics News: Q1 2013 LTL Carrier Review
Financial Recovery at YRC Worldwide Continues, While Old Dominion Continues to Impress
SCDigest Editorial Staff
We're back as usual every quarter with our review of the results and comments from leading public transportation carriers, as the last of them finished up their earnings reports in the last few weeks.
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| YRC thankfully noted that the industry is now operating in "a rational pricing environment" that clearly did not exist for a number of years following the recession starting in 2008. |
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What Do You Say?
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Last week, we took a look at the four major public US rail carriers (see Q1 2013 Rail Carrier Review), and the week before that the US truckload sector (see Q1 2013 Truckload Carrier Review.)
This week, we'll wrap it up with a review of results from the US less-than-truckload (LTL) sector.
For three of the four quarters we provide results for both the just closed quarter as well as year-to-date numbers, but as nearly all carriers operate on a calendar year basis, after Q1 the quarter and year-to-date are obviously the same, so the latter is unneeded.
We'll also note that we do not include results for the LTL operations of FedEx (the largest LTL carrier) or UPS, for two separate reasons. FedEx operates in an offset quarter, ending on February 28, making comparisons with other LTL carriers difficult. For example, FedEx's results for the quarter would have included December, while the others all operate on straight calendar quarters.
That includes UPS, but that company combines the LTL metrics with other logistics services, making it impossible to really break out the LTL numbers, despite our best efforts.
That noted, the two biggest stories in the LTL sector in Q1 were probably: (1) the continued financial recovery of YRC Worldwide, after the near-death experience of recent years, as it made a quarterly operating profit in Q1for the first time since 2007 (note that is different than net income); and (2) Old Dominion's excellent operating results that again left the rest of the LTL field far behind.
Though revenue growth at Old Dominion slowed a bit this quarter from the recent past (though still a healthy 7.1%), profits were up another 30%, as net income was 7.1% of revenues, versus -3% to plus 3% for the rest of the group. That was achieved by dropping its operating ratio to just 87.6%, versus 95.8% for the next best, Conway's LTL group. That number is also better than all the truckload carriers we follow with the exception of Heartland and Marten, and just barely higher than those TL leaders reported in Q1.
That Q1recap doesn't of course include the May news that YRC Worldwide, despite nearly going under after an acquisition spree in the early and mid-2000s that did not work out as planned, is now seeking to acquire Arkansas Best, parent of LTL carrier ABF Freight. That company has employed a "just go away" strategy on the offer, but YRC is now said to be looking at other routes to make the deal happen.
We'll also note that Arkansas Best's strong 18% revenue growth in Q1 was mostly a result of including the numbers from expedited service provider Panther Express, which it acquired last year, and which added some $44 million to the top line.
Q1 2013 LTL Sector Results
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Carriers indicated that core price gains were about 3% in Q1, with YRC thankfully noting that the industry is now operating in "a rational pricing environment" that clearly did not exist for a number of years following the recession starting in 2008.
(Transportation Management Article Continued Below)
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