In an otherwise modest quarter for US LTL carriers, Old Dominion is back to blowing away the competitive field.
Supply Chain Digest Says... |
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| Old Dominion's OR of 80.9% pulled down the average, with the other carriers in the low to mid-90 percentages. This is a huge advantage for Old Dominion. |
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We're back as usual every quarter with our review of the results and trends across freight modes, starting two weeks ago week with US truckload carriers (see Strange Q3 for Truckload Carriers, as Market Strong, Profits Down).
Then last week we reviewed results from the four main US publicly traded rail carriers. (See Rail Carriers See Profits Up Despite Low Volumes, Hurricanes.)
And as usual, we'll note our LTL analysis 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).
In addition, FedEx runs an unusual fiscal calendar - with its first quarter ending Aug. 31, for example - so that comparisons to standard quarters in terms of results for the other carriers doesn't work well.
Similarly, XPO Logistics mixes together several reporting segments into its numbers for "transportation," and its LTL business (largely built from the Con-Way acquisition) is not broken out in any detail.
After several years of outstanding results, a few quarters back Old Dominion appeared to lose some of its mojo, with slowing revenue and profit growth, as it simply looked like it was coming back to earth.
That started to change again though in Q2, while Q3 saw Old Dominion getting back to incredibly strong results. For example, its Q3 revenue was up 11.5% on a big 8.6% increase in tonnage per day. Saia saw an also strong 10.6% revenue increase, while YRC Worldwide saw the top line grow 2.5% and ArcBest/ABF 4.3%. LTL tonnage for these other carriers ranged from down 3% at ArcBest to up 2.5% at YRC and 3.6% at Saia, all far below Old Dominion's growth.
Profits at Old Dominion jumped 19.6% versus Q3 2016. ArcBest also saw strong growth in net income of 14.3%, while Saia profits rose 4.2%. YRC made just $3 million in the quarter, down 78% from last year.
Average operating ratios (OR), or operating expense divided by operating revenue, a key metric in the transport sector, fell to an unweighted average of 81.2% versus 92.8% in 2016. However, that as usual was a bit misleading, at Old Dominion's OR of 80.9% pulled down the overall average, with the other carriers in the low to mid-90 percentages. This is a huge advantage for Old Dominion.
The carriers generally reported a strong rate environment in the quarter. For example, ArcBest comments that the industry "In the midst of a solid LTL pricing environment," while Saia said its LTL revenue per hundredweight - a proxy for rate increases, was up 8.0% in Q3.
Below is the full table of US LTL carrier results in Q3.
US LTL Carrier Q3 2017 Results
Source: SCDigest from Carrier Earnings Releases
(See More Below)
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CATEGORY SPONSOR: SOFTEON |
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YRC Worldwide
Achieved operating income of $40.1 million.
Last twelve month (LTM) consolidated Adjusted EBITDA is $273.4 million compared to $305.8 million in 2016. However, the total debt-to-Adjusted EBITDA ratio for third quarter 2017 is rising, at 3.52 times compared to 3.45 times for third quarter 2016.
Excluding fuel surcharge, revenue per hundredweight – a proxy measure for rate changes - increased 2.4% at the YRC Freight segment, and just 0.3% at the regional segment.
In its usual liquidity update, YRC said that for the nine months ended September 30, 2017, cash provided by operating activities was $64.2 million compared to $86.0 million for the nine months ended September 30, 2016. At September 30, 2017, the company's outstanding debt was $962.4 million, a decrease of $93 million compared to $1.055 billion as of September 30, 2016.
ArcBest/ABF Freight
Company is phasing out the ABF Freight brand, putting all services under the ArcBest banner,.
Excluding fuel surcharge, the percentage increase in revenue per hundredweight in ArcBest’s Asset-Based LTL freight was up strong, in the mid-single digits.
Company noted that "In the midst of a solid LTL pricing environment, yield management actions implemented throughout 2017, including this quarter’s space-based pricing initiative [dimensional pricing] resulted in higher revenue per hundredweight and improved revenue per shipment."
Old Dominion
After delivering blow-out results, the company said ""The strengthening economy supported our third quarter revenue growth, but we also believe that tightening industry capacity and pricing increases accelerated the pace of our revenue growth for September. Due to the upward trend in the industry pricing environment, our ability to deliver superior service at a fair price has become a critical competitive differentiator in the LTL industry."
Revenue per hundredweight, excluding fuel surcharges, rose 2.4%, even as length of haul decreased, which usually sends that metric lower.
The Company expects its capital expenditures for 2017 to total approximately $400 million, including planned expenditures of $185 million for real estate and service center expansion projects, $170 million for tractors and trailers, and $45 million for technology and other assets.
Saia
Company said "We continue to see strong demand and stable pricing in our business."
LTL revenue per hundredweight increased 8.0%.
Company said "We opened our 5th new terminal of the year on October 16th. The terminal is located in Laurel, Md. and will help us to serve customers in and around the markets of Baltimore, Md. and Washington, D.C. We are planning to open a terminal in Allentown, Pa. in December and have two additional Northeast expansion properties identified."
Any reaction to the Q3 results and trends from the LTL carriers? Let us know your thoughts at the Feedback section below.
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