In a March 4 press release, Old Dominion Freight Line (NASDAQ: ODFL) reported a small decline in revenue compared to the year-ago period.
The less-than-truckload (LTL) carrier reported a 1% year-over-year decline in revenue per day for the month of February as daily LTL tonnage declined 5.2%, partially offset by an increase in revenue per hundredweight, (revenue/cwt) or yield. LTL shipments were 3.7% lower and weight per shipment was down 1.5% in February.
“We are off to a good start in 2020, and our revenue trends for the first two months of the year are in alignment with our initial expectations. While our revenue for February was down on a year-over-year basis, our volume trends were consistent and yields also continued to improve,” said Old Dominion President and CEO Greg Gantt.
The company reported a 0.2% decline in revenue per day for January in its annual 10-k filing with the U.S. Securities and Exchange Commission, which was filed on February 26. The filing stated that daily tonnage was 3.6% lower year-over-year as shipments declined 2.5% and weight per shipment was down 1.1%.
Most LTL carriers continue to navigate softer demand as industrial markets remain under pressure.
The PMI, a survey of manufacturing supply executives, has hovered near or below the all-important 50% level since breaching this threshold for the first time during this cycle in August 2019. A sub-50% reading implies contraction in the U.S. manufacturing sector.
Manufactured goods can represent nearly 85% of total tonnage for some LTL carriers.
While LTL volumes have been a headwind to revenue for most carriers, the group appears to have maintained rate discipline during the demand downturn.
In the press release, Old Dominion reported a 4.3% year-over-year increase in revenue/cwt, up 4.5% excluding fuel surcharges, through the first two months of 2020.
Old Dominion implemented a 4.9% general rate increase (GRI) effective March 2.
Regarding the month of February and macroeconomic concerns, Gantt continued, “Our revenue accelerated throughout the month, and we expect to see continued acceleration through the end of the quarter. We are mindful, however, of increased risks to the domestic economy and the potential impact on the demand for our services.”
Updates from other LTL carriers
Yesterday, LTL carrier Saia, Inc. (NASDAQ: SAIA) reported a 7.7% year-over-year increase in tonnage during January as LTL shipments grew by 8% and weight per shipment was only 0.3% lower. However, the company reported only a 0.4% increase in February tonnage with shipments up 1.5% and weight per shipment declining 1.1%.
Saia’s robust tonnage growth rates have started to slow. The carrier launched an aggressive Northeast expansion project in 2017, opening 18 terminals in the region since the program’s inception. Its efforts accelerated with the closure of New England Motor Freight, Inc. (NEMF) in February 2019. However, Saia said that it plans to scale back expansion plans in 2020 during its fourth-quarter 2019 earnings call, which was held on February 3.
In its 10-k filing on February 28, LTL carrier ArcBest Corporation (NASDAQ: ARCB) reported that its asset-based revenue had increased 1.5% year-over-year in the first quarter of 2020 through late February. The carrier reported a 6% increase in tonnage, which was partially offset by a 4.5% decline in revenue/cwt. The filing went on to show that LTL tonnage increased by a “low single-digit percentage” with spot truckload (TL) shipments climbing double-digit percentages. LTL weight per shipment increased approximately 3% in the period.
ArcBest reported that LTL revenue/cwt so far in 2020 has been flat year-over-year excluding the impacts from fuel surcharges. The company implemented a 5.9% GRI on February 24 that will affect approximately one-third of its asset-based revenue.
Lastly, YRC Worldwide Inc. (NASDAQ: YRCW) reported a 0.8% decline in tonnage in its freight division with a 3.7% tonnage decline in its regional segment for the month of January during its fourth-quarter earnings call on February 4.