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Focus: Transportation Management

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From SCDigest's On-Target E-Magazine

- May 21, 2014 -


Logistics News: Q1 2014 LTL Carrier Review


Weather Hurts Top and Bottom Lines, but Union Pacific Once Again Finds Smooth Tracks; Rail Pricing Power Seems to be Dwindling

SCDigest Editorial Staff


We're finishing up this week SCDigest's regularly quarterly review of the results and comments from leading transportation carriers by mode, this week for the less-than-truckload carriers, as the last of them finished up their Q1 2014 earnings reports in the last two weeks.

SCDigest Says:

Union Pacific reiterated its plan to reach a full-year operating ratio of under 65% before 2017.
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Last week, we covered the US rail carriers (see Q1 2014 Rail Carrier Review) and the week before the truckload sector (see Q1 2014 Truckload Carrier Review).

Here we look at five major LTL carriers. The analysis, however, does not include either FedEx (the largest LTL provider) or UPS, because the way both repoert the numbers does not allow for a apples to apples comparison with the more dedicated LTL providers.


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.














For Quarter Ending March 31, 2013 Data in $Thousands
Carrier YRC Worldwide Arkansas Best/ABF* Old Dominion Conway** Saia Total Carriers
Total Operating Rev Including Fuel $1,210,900 $577,904 $620,276 $848,027 $299,730 $3,257,107
Change 2014 from  2013 4.2% 11.0% 15.2% 2.5% 9.5% 6.8%
LTL Tonnage 2.5% 5.4% 13.9% 0.3% 5.7% 5.5%
Net Income -$70,200 -$5,193 $45,887 $18,565 $8,576 -$2,365
Change 2014 from  2013 Had loss of $24.5  million in Q1 2013 Had loss of  $13.3 million in Q1 2012  13.2% 15.9% -6.3% -103.1%
Net Income as % of Revenue 2014 (total is unweighted average)  -5.8% -0.9% 7.4% 2.2% 2.9% 1.2%
Net Income as % of  Revenue 2013 2.1% -2.6% 7.5% 1.9% 3.3% 2.5%
LTL Operating Ratio 2014 (total is unweighted average) 102.7% 102.8% 87.1% 97.8% 94.9% 97.1%
LTL Operating Ratio 2013 99.1% 105.5% 87.8% 98.1% 94.7% 97.0%
* Includes numbers from its Panther Express Unit, except for OR percents
** The Conway numbers refer only to its LTL group, not the business as a whole, which includes Menlo Logistics, a truckload business, and other units 
Conway Income refers to Operating Income only for LTL group, before other expenses
that would be included in full net income number as is posted for the other carriers.



(Transportation Management Article Continued Below)


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In the section below, we break out key points made in each carrier's earnings releases and analyst presentations, although the the releases tended to be rather terse this quarter.


YRC Worldlwide

consolidated operating loss reported at $32.4 million.

"This was one of the worst winter seasons in my more than 30 years in trucking. We estimate that it negatively impacted our operating income by approximately $20 million. The main culprits were lower volumes, decreased productivities and higher use of purchased transportation," stated CEO James Welch.
Workers comp and cargo claims - $13.2 million
The good news is that during the first quarter of 2014, we laid the foundation for our future operational improvements based on changes provided by the recently ratified MOU
104.3 versus 98.3% for regional group

Arkansas Best/ABF Freight

Arkansas Best Corporation to Become ArcBest Corporation

ABF Freight 428,000 versus 407
The estimated operating income impact of first quarter severe weather at ABF Freight was
approximately $10.5 million.
ABF Freight’s pre-tax first quarter pension settlement charges equaled $2.9 million. $12.2 operating loss at ABF

"The improving economy and tightened industry capacity have contributed to a positive pricing
Environment," though revenue per hundredweight up just .7%.

As previously announced, ABF Freight implemented a general rate increase during the last full week of March.

The previously announced consolidation of smaller ABF Freight facilities began in the second half of 2013, with the initial closing of 8 terminals. During the first quarter of this year, 22 additional ABF Freight facilities were consolidated by mid-March.

Old Dominsion

"Old Dominion achieved strong financial results for the first quarter of 2014, which included a company record for quarterly revenue despite the negative impact of the severe winter weather,"

Revenue growth accelerated throughout the quarter, and our momentum has continued thus far into April.

87.1% Q1 record

We opened new service centers in Newburgh, NY and Bend, OR

capital expenditures for 2014 to be approximately $367 million, including planned expenditures of $132 million for real estate and expansion projects at existing facilities, $188 million for tractors, trailers and other equipment and $47 million for technology and other assets.

LTL revenue per hundredweight, excluding fuel surcharges, increased 2.2% despite the negative effect on this metric from the increased weight per shipment and decreased average length of haul.

Conway Freight

Revenue per hundredweight, or yield, increased 1.0 percent from the previous-year first quarter. Excluding the fuel surcharge, yield also rose 1.0%
As the quarter progressed, demand strengthened which supported a firm pricing environment."



Company was able to improve LTL pricing by 2.3% in the quarter," said CEO Rick O'Dell.

Added that "With the operational challenges of the first quarter weather behind us, we are encouraged about our prospects for the remainder of 2014.

Any reaction to our Q1 2014 rail segment review? Let us know your thoughts at the Feedback button (for email) or section (for web form) below.



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