Business

SAVANNAH, Ga. — The Port of Savannah exported more loaded containers than any other port in the country from January through May of 2020, achieving a 12.2% market share. Garden City Terminal handled a total of 593,195 twenty-foot equivalent container units (TEUs) of loaded exports during the first five months of the calendar year. “In today’s environment, businesses need every advantage to regain momentum and provide the growth that helps so many hard-working Americans to prosper,” said Georgia Gov. Brian Kemp. “The Georgia Ports Authority is a powerful economic engine for the state, and a key link in the supply chain for industries across the region.” Positioned at the center of a broad logistics network, Savannah offers 37 weekly container ship services that reach destinations around the world, on-terminal service from Class I railroads Norfolk Southern and CSX, and direct access to Interstates 95 and 16. “With the expansion of the Panama Canal and the transition of larger vessels to East Coast services, cargo owners are making the strategic decision to keep imports on the water longer,” said Griff Lynch, executive director of Georgia Ports Authority (GPA). “Subsequently, export customers enjoy greater empty container availability in Savannah, lower container slot costs on Neo-Panamax vessels, and unmatched cargo fluidity through road, rail and terminal services.” Among Savannah’s top export commodities, the biggest gainers for the period were raw cotton, which grew by 61% (16,377 TEUs) for a total of 43,234 TEUs; wood pulp, up by 15.8% (11,539 TEUs) for a total of 84,595 TEUs; and kaolin clay, up 23.7% (7,964 TEUs) for a total of 41,527 TEUs. “Our export numbers show how the Georgia Ports Authority plays a vital role as a state and national asset, supporting farms and factories across the country,” said Will McKnight, board chairman for GPA. “Terminal efficiency is about more than moving cargo quickly. It’s about helping American companies compete in the global marketplace.” Georgia’s deepwater ports are still dealing with the impact of COVID-19 but have seen steadier trade numbers than other U.S. ports. In July, the Port of Savannah handled 360,700 TEUs, down 6.8% (26,325 TEUs) compared to the same month last year. Total tonnage for the month dipped 3.1% (101,870 tons) for a total of 3.16 million tons for the first month of fiscal year 2021. “Georgia’s diverse industry, its position as a major agricultural producer and its central location within the U.S. Southeast have helped to mitigate the worst impacts of the pandemic on trade through our terminals,” Lynch said. “Along with our partners in the International Longshoremen’s Association, motor carriers, railroads, stevedores and the distribution centers, we have been proud to provide steady, reliable service to our customers without delays or interruptions.”

COLUMBUS, Ind. — In two of its latest reports, experts at ACT Research note that the COVID-19 pandemic is not the only issue that is impacting the North American commercial vehicle market. According to ACT Research’s recently released Transportation Digest, COVID-19 is just one of several factors that could impact commercial vehicle forecasts now and in the foreseeable future. The report, which combines proprietary ACT data and analysis from a variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. The monthly report offers a quick look at transportation insights, reviewing top-level considerations such as for-hire indices, freight, heavy- and medium-duty segments, the U.S. trailer market, used truck sales information and an overview of the U.S. macro economy. “The general trend of the COVID contagion curve through July was rising, but in early August newly reported cases were dropping, according to Johns Hopkins,” said Steve Tam, vice president of ACT. “In general, we are seeing favorable COVID trends in international economies, as well,” he continued. “That said, until we have a permanent cure for, or way to control, the coronavirus outbreak, that will remain the biggest risk to the commercial vehicle forecast in the short- and long-term.” Tam also noted that while it could be easy to overlook other risks because of the global emphasis on COVID-19, it is vital that all threats to the commercial vehicle market be considered. “One obvious threat is the increasingly tense bilateral relationship of the U.S. and China, and another is the outcome of November’s election,” he said. On the upside, however, he noted, “We’re seeing promising levels of activity in key goods-producing and goods-distribution industries that drive motor freight and logistics, such as manufacturing, construction, and wholesale/retail trade, with e-commerce carrying the load in distribution.” ACT also recently released its Commercial Vehicle Dealer Digest, which reported that freight markets continue to be less impacted by the pandemic than the economy at large, and that a vaccine against COVID-19 is seen as the key to unlocking a more broad-based recovery, as the simplest human interactions will no longer have to be weighed and justified. “Even as the economy struggles to regain its footing post-COVID and pre-vaccine, freight markets have been somewhat less impacted,” Tam said. “Most freight is related to society’s most basic needs: food, shelter, clothes, transportation,” he continued. “A positive for freight, in the current environment, is that much of the discretionary spending that was ‘experience’ focused, like travel, attending events, and dining in restaurants, has been replaced by goods-based purchases that generate a greater amount of freight per dollar.” When asked how the commercial vehicle industry is faring, Tam commented that parked capacity is one consideration he sees as weighing on the market. “But even with that, a case can be made for a steady, if modest, Class 8 market rebound from here,” he stated. “Based on continued increases in Classes 5-7 build, the OEMs appear to be betting on business and consumer resilience, while trailer forecasts are improving at the margin with accelerated trends in e-commerce boosting LTL demand and a new generation of home cooking driving some gains in multitemp refrigerated vans,” he concluded.

WASHINGTON — An Aug. 25 bulletin from the U.S. Department of Transportation (DOT) showed improvement in the North American freight industry in June after drop-offs in April and May. Data in the DOT release was not seasonally adjusted or adjusted for inflation. According to the bulletin, transborder freight between the U.S., Canada and Mexico rebounded in June with $82.1 billion in freight moved across all modes of transportation, a 46.3% improvement over May and up 41.2% from April. Even with these signs of improvement, June’s transborder freight value was down 20.9% compared to June 2019. Total transborder freight between the U.S. and Canada was up 31.8% from May, but down 23.1% from June 2019. Freight movement between the U.S. and Mexico was up 64% from May and down 18.7% from June 2019. Trucks moved $56.5 billion in freight across the U.S.-Mexico and U.S.-Canada borders during June, accounting for 68.8% of all transborder freight for the month, with totals of $31 billion and $25.4 billion, respectively. Compared to May, U.S.-Mexico freight increased by 58.5% but was down 12.9% from June 2019. U.S.-Canada freight rose 30% from May but was down 15.2% from June 2019. According to the DOT bulletin, the three busiest truck border ports, accounting for 44.9% of all transborder truck freight, were Laredo, Texas ($12.5 billion; Detroit ($7.9 billion); and Ysleta, Texas ($4.9 billion). The top three truck commodities (49.5% of total transborder truck freight) included computers and parts ($11.6 billion), electrical machinery ($9 billion) and vehicles and parts ($7.3 billion). Other modes of transborder freight movement during June included rail ($11.3 billion), vessel ($3.8 billion), air ($3.4 billion) and pipeline ($2.8 billion).

BELLEVUE, Wash. — The COVID-19 crisis continues to impact the trucking industry during 2020, and PACCAR’s second-quarter figures show that even OEM giants are not immune to the pandemic’s impact on the economy. The company, which produces Kenworth, Peterbilt and DAF trucks, earned net income of $147.7 million (43 cents per diluted share) in the second quarter of 2020, compared to $619.7 million ($1.78 per diluted share) earned in the same period of 2019. Second-quarter net sales and financial services revenues were $3.06 billion, compared to $6.63 billion achieved in the second quarter of last year. Despite the significant drops, CEO Preston Feight describes the quarter as “good,” in light of the COVID-19 pandemic. “PACCAR closed its factories for five weeks at the beginning of the quarter and has gradually resumed production while enhancing operating processes and procedures for employee health and well-being, manufacturing efficiency and customer satisfaction. I am very proud of our outstanding employees who delivered excellent production and distribution performance while enhancing PACCAR’s rigorous health and safety standards,” he said. “PACCAR’s truck production and PACCAR Parts’ aftermarket sales steadily increased as the quarter progressed,” he continued. “PACCAR’s quarterly profits are a direct result of its proven business model — premium trucks and transportation solutions, flexible manufacturing processes, a strong balance sheet, and rigorous cost control while maintaining R&D and capital investments that drive long-term growth.” PACCAR reported first half net income of $507.1 million ($1.46 per diluted share), compared to $1.25 billion ($3.59 per diluted share) earned in the first six months of 2019. Net sales and financial services revenues for the first six months of 2020 were $8.22 billion, compared to $13.12 billion achieved last year. “PACCAR is in excellent financial position, with manufacturing cash and marketable securities of $4.17 billion at June 30, 2020 and bank facilities of $3.0 billion,” shared Mark Pigott, executive chairman. The company has credit ratings of A+/A1. PACCAR’s board of directors declared a regular quarterly cash dividend of 32 cents per share, payable on Sept. 1, 2020, to stockholders of record at the close of business on Aug. 11, 2020. Highlights of PACCAR’s financial results for the second quarter of 2020 include: Net sales and revenues of $3.06 billion; Net income of $147.7 million; Global truck deliveries of 18,100 units; PACCAR Parts revenues of $823.7 million; PACCAR Parts pre-tax income of $151.9 million; Financial Services pre-tax income of $55.5 million; Manufacturing cash and marketable securities of $4.17 billion; Cash generated from operations of $934.9 million; and Stockholders’ equity of $9.78 billion. Highlights of PACCAR’s financial results for the first six months of 2020 include: Net sales and revenues of $8.22 billion; Net income of $507.1 million; Capital investments of $308.8 million and R&D expenses of $137.5 million; Financial Services pre-tax income of $103.8 million; Cash generated from operations of $1.36 billion; and Medium-term note issuances of $1.33 billion. Global Truck Markets Class 8 truck industry retail sales in the U.S. and Canada are estimated to be in a range of 160,000 to 190,000 trucks in 2020, though the market size and economy could be impacted if there was a resurgence of COVID-19. Peterbilt and Kenworth achieved U.S. and Canada Class 8 truck retail sales market share of 29.6% through June this year, compared to 29.1% during the same period last year. “The U.S. and Canada Class 8 truck market is rebounding as state and local economies re-open,” said Mike Dozier, senior vice president. “Customers benefited from lower fuel costs, and many sectors experienced higher freight volumes and improved freight pricing as the quarter progressed. Class 8 truck industry orders in June were 28% higher than June last year.” The European and South American truck markets look to be “bouncing back,” according to DAF executives. “Customer demand for fuel-efficient DAF XF, CF and LF trucks bounced back in May and June as the European economies improved,” said Harry Wolters, DAF president. European truck industry registrations in the above 16-ton market are estimated to be in a range of 190,000 to 220,000 vehicles this year. The South American above 16-ton truck market is projected to be in a range of 60,000 to 80,000 trucks in 2020. “Customers appreciate the durability and reliability of DAF trucks in Brazil, which is one of the most demanding operating environments in the world,” said Mike Kuester, assistant vice president of South America. “DAF achieved a record 9.1% market share in the Brazil above 40-ton truck segment in the first half of this year.” PACCAR Parts PACCAR Parts achieved quarterly revenues of $823.7 million in the second quarter of 2020, compared to $1.03 billion achieved in the same period last year. Second quarter 2020 pre-tax profit was $151.9 million, compared to $210.6 million achieved in the second quarter of 2019. PACCAR Parts first half 2020 revenues were $1.82 billion, compared to $2.03 billion in the same period last year. PACCAR Parts achieved pre-tax profit of $366.6 million in the first six months of 2020, compared to $418.2 million earned in the first six months of 2019. “Some customers deferred vehicle maintenance during the quarter, which impacted parts purchases. The stronger economy and higher truck traffic in June increased demand for aftermarket services,” said David Danforth, PACCAR vice president and PACCAR Parts general manager. “PACCAR Parts has invested in its e-commerce platform for many years, which benefits our customers and dealers. PACCAR Parts’ global e-commerce retail sales increased 20% in the first half of 2020 compared to the same period last year,” said Jim Walenczak, PACCAR Parts assistant general manager. PACCAR continues to add global distribution capacity to deliver industry-leading aftermarket parts availability to its customers. PACCAR’s new 250,000 square-foot distribution center in Las Vegas and new 160,000 square-foot distribution center in Ponta Grossa, Brazil opened during the second quarter. Financial Services PACCAR Financial Services (PFS) has a portfolio of 202,000 trucks and trailers, with total assets of $15.05 billion. PACCAR Leasing (PacLease), a full-service truck leasing company, is included in this segment. Second quarter PFS pre-tax income in 2020 was $55.5 million compared to $80.3 million earned in the second quarter of 2019. Second quarter 2020 revenues were $360.3 million compared to $361.4 million achieved in the same quarter of 2019. For the first six months of 2020, PFS earned pre-tax income of $103.8 million compared to $164.3 million last year. First-half 2020 revenues were $744.0 million compared with $710.9 million for the same period a year ago. “PFS’ portfolio performed well during the second quarter of 2020,” said Todd Hubbard, PACCAR vice president. “The used truck market is experiencing lower vehicle resale values. PACCAR Financial is investing in worldwide used truck retail centers to sell an increased number of used trucks at retail prices, which enhances used truck sales margins. PFS recently opened used truck centers in Denton, Texas, and Prague, Czech Republic, and plans to open a used truck facility in Madrid, Spain.” “PACCAR’s excellent balance sheet, complemented by its A+/A1 credit ratings, enables PFS to offer competitive retail financing to Kenworth, Peterbilt and DAF dealers and customers in 26 countries on four continents,” said Craig Gryniewicz, president of PACCAR Financial Corp. “We have excellent access to the commercial paper and medium-term note markets, allowing PFS to profitably support the sale of PACCAR trucks.”

SCOTTSDALE, Ariz., and CAMDEN, N.J. — NFI Industries has collaborated with Blue Yonder to offer on-the-spot price quoting and freight capacity through an integration with Blue Yonder’s dynamic pricing discovery solution. As freight capacity tightens, the ability to find the right carrier at the right price becomes increasingly difficult. Using Blue Yonder’s dynamic pricing discovery solution, NFI will be able to provide real-time price quotes based on market dynamics, while also securing the necessary freight capacity. NFI will also extend its reach to more shippers through Blue Yonder’s transportation management solution, which has a large portfolio of customers. The dynamic price-discovery solution can be seamlessly adopted by existing Blue Yonder transportation management customers. By syncing their technologies, Blue Yonder and NFI will help increase profitability for shippers and carriers. NFI serves customers across a variety of industries, and is dedicated to providing customized, engineered solutions that help businesses succeed. In addition to specialized non-asset logistics solutions, NFI’s integrated services span dedicated transportation, warehousing, intermodal, global logistics and real estate services. “Collaborating with the right technology partners has been key in elevating the customer experience we have been able to deliver and to NFI’s growth,” said David Broering, president of non-asset solutions for NFI. “Our partnership has generated new ways for us to engage customers, enabled us to better help shippers continually improve, and established a more reliable and sustainable foundation that allows NFI to be more efficient, agile, and innovative.” Blue Yonder’s dynamic price discovery solution is built on the company’s Luminate Platform, powered by Microsoft Azure. Luminate Platform combines data from both internal and external sources — spanning shippers’ digital supply chain ecosystems — to leverage both artificial intelligence and machine learning, enabling smarter and more actionable business decisions. “We’re excited to be working with NFI to help them grow their leadership position in the freight marketplace,” said Terry Norton, vice president of 3PL and transportation for Blue Yonder. “The ability to obtain real-time pricing and capacity using the dynamic pricing discovery solution will allow NFI to grow its non-asset based carrier business while providing these carriers with the ability to meet their business needs to get goods where they need to be at a predictable price.”

ARLINGTON, Va. — American Trucking Associations’ (ATA) advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 5.1% in July after surging 8.9% in June, the association said today (Aug. 18). In July, the index equaled 109.6 (2015=100) compared with 115.5 in June. “After a very strong June, for-hire contract freight tonnage, which dominates ATA’s index, slipped in July for a couple of reasons,” said Bob Costello, chief economist for ATA. “It is likely that tonnage was down because many fleets didn’t have the capacity to take advantage of stronger retail freight volumes. Therefore, much of that overflow freight moved to the spot market, which did increase in July,” he noted. “Other ATA data shows that for-hire truckload fleets are operating 3% fewer trucks this summer than a year earlier, so it can be difficult to take on a significant amount of additional freight. Also, while retail volumes have snapped back strongly, manufacturing output and international trade freight is lagging well behind.” Despite July’s decline, the index was still 3.3% above the recent low in May. June’s increase was revised up slightly to 8.9% from ATA’s July 21 press release. Compared with July 2019, the seasonally adjusted index contracted 8.3%, the fourth straight year-over-year decline. Year to date, compared with the same period in 2019, tonnage is down 3.2%. The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 112.9 in July, 2.5% below the June level of 115.8. In calculating the index, 100 represents 2015. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight. ATA calculates the tonnage index based on surveys from its membership. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators.

DOWNERS GROVE, Ill. — Roadrunner Transportation Systems Inc. has closed three transactions, completing the company’s divestiture of all truckload segment businesses, according to a statement released Aug. 17. The transactions include the sale of Rich Logistics and Integrated Services Inc. (ISI) to an undisclosed strategic buyer, as well as the sale of Roadrunner Temperature Controlled (RRTC Holdings Inc.) to Laurel Oak Capital Partners. “With (these) actions, we have completed our evolution from a troubled roll up to a focused, national LTL carrier,” said Chris Jamroz, executive chairman of Roadrunner. “We are eternally grateful to our team for the long hours and hard work through the prolonged period of transition.” The divestitures complete a reorganization that involved the sale of Roadrunner’s intermodal services in November 2019, flatbed in December 2019, prime distribution in March, and stagecoach in April. With the previously announced completion of the spin-off of Ascent Global Logistics Inc., Roadrunner now consists solely of its less-than-truckload operations. Other changes to Roadrunner associated with the transactions noted above include the following: Svindland joins board of directors At the time of the Ascent spin-off, Paul Svindland, CEO of STG Logistics, joined Roadrunner’s board of directors. Svindland most recently served as CEO of Celadon Group; before Celadon, Paul was chairman and CEO of Farren International, a private equity backed flatbed trucking company. Donald C. Brown and Scott Dobak remain as independent directors on Roadrunner’s board of directors, and Christopher Doerr has moved over to the Ascent Global Logistics Board. “With deep experience in the logistics and transportation sector, Paul will no doubt lend invaluable advice and perspective to our board and executive leadership team as we enter Roadrunner’s next chapter,” Jamroz said. New credit facility With the completion of the Ascent spin-off, Roadrunner’s existing senior secured credit facility with BMO Bank Harris N.A. has been terminated and Roadrunner has entered into a new $45 million senior secured asset-based credit facility with Crystal Financial. Roadrunner’s divestitures and the spin-off of Ascent have reduced the company’s balance sheet liabilities by approximately $400 million, leaving the company with a net cash position. “We enter this new stage of Roadrunner with the healthiest balance sheet in the company’s history,” said Frank Hurst, president of Roadrunner Transportation Systems. Roadrunner freight update Hurst and the Roadrunner management team have provided an update on the company’s business performance and strategy to date: “In Q4 2019, we made a deliberate shift in our LTL strategy to focus on customers and drivers instead of short-term profitability. This change in approach led every team member to commit to a new mantra, ‘Ship it like you own it,’” Hurst said. “It also required operational investments in Q4 2019 and Q1 2020, generating average losses of approximately $4 million per month. However, we dramatically improved transit times and launched a quality campaign that resulted in drastic reductions of delivery exceptions,” he continued. “With clearly improved service levels, our sales have continued to grow and enabled our team to onboard business with several new national accounts. Despite highly depressed volumes in March and April from COVID-19, we were able to return to growth in May and posted our first positive EBITDA month in three years, albeit a very modest level,” he concluded. Year to date, the company has increased its independent contractor count by more than 100 drivers and has achieved the lowest 12-month turnover in recent history. The company has also launched a new analytical tool of driver performance metrics, called RoadPRO, to promote safety, service and operational results within the fleet. “We plan to continue prioritizing service levels over profitability for the foreseeable future and will take advantage of our strong balance sheet to continuously redeploy profits generated into new technology, continuous lane enhancement and an improved driver and team member experience,” Hurst said. “Our ‘Ship it like you own it’ mantra embodies how we treat customers’ freight, and it is gratifying to see that our customers are noticing.” Roadrunner Freight opened new facilities in Riverside, California, on July 22 and in Philadelphia on August 3. The two facilities offer significant enhancements to the company’s nationwide LTL network. A new Chicago service center, with double the capacity of the current Chicago facility, will open in late August. “We have seen COVID-driven disruptions in pockets of our network in June and July, despite our focus on quality service. This is partially due to large growth in e-commerce volume, which created facility and staffing constraints in a few markets,” Hurst said. “Our new facilities are already making a positive impact, and any service issues experienced will be rectified in the near future. I appreciate our customers’ patience as we make the necessary changes to support these increased volumes of freight,” he said. “We are thrilled to be a standalone business and are grateful to our customers, business partners and team members who have stuck with us through our transformation,” he continued. “I am proud to say we have never been as strongly positioned for the future as we are today.”

GREEN BAY, Wisc. — Schneider National Inc. released results for the second quarter of 2020 in late July, reporting drops in both operating revenue and income compared to 2019. The company’s operating revenues for April-June of this year were $1 billion, down from $1.2 billion in 2019, and adjusted income from operations dropped to $63.6 million for 2020 compared to $83.8 million last year. “During the second quarter, operating conditions varied across our diverse portfolio of services largely due to the differing effects of COVID-19,” said Mark Rourke, president and CEO of Schneider. Enterprise income from operations for the second quarter of 2020 was $63.4 million, an increase of $14.2 million (29%) compared to the same quarter in 2019. Second quarter 2019 income from operations included a $34.6 million goodwill impairment charge related to the First to Final Mile (FTFM) service offering, which was shut down in August 2019. Adjusted income from operations was $63.6 million for the second quarter of 2020, a decrease of $20.2 million (24%) compared to the same quarter in 2019. “Of our various segments, intermodal was most negatively impacted by the pandemic while the impact to truckload and logistics was proportionately less. Volumes improved as the quarter progressed, and our cost containment actions helped mitigate the earnings impact of the challenging market. By mid-May, we were able to pivot from sustaining our operations and return to advancing our strategic initiatives,” Rourke said. “I’m proud of the performance and adaptability of our associates and want to publicly thank our professional drivers who are on the front line and are vital to keeping goods moving throughout the country.” Truckload revenues (excluding fuel surcharge) for the second quarter of 2020 were $451.1 million, a decrease of $83.8 million (16%) compared to the same quarter in 2019, primarily due to the shutdown of FTFM and lower volume and price. Truckload volume increased as the quarter progressed and ended June near prior year levels (adjusted for FTFM). Truckload income from operations was $40.5 million in the second quarter of 2020, an increase of $32.6 million, compared to the same quarter in 2019 which included goodwill impairment of $34.6 million and operating losses of $13.1 million related to FTFM. Improved variable cost management in areas of driver recruiting, maintenance and fuel partially offset the impact of lower volume and price. Truckload segment operating ratio was 91% in the second quarter of 2020 compared to 98.5% in the second quarter of 2019. Adjusted for the effects of FTFM, second quarter 2019 operating ratio was 89%. “In our truckload segment, we redeployed and leveraged resources across both our network and dedicated operations to meet the dynamic needs of our customers,” Rourke said. Intermodal revenues (excluding fuel surcharge) for the second quarter of 2020 were $219 million, a decrease of $40.8 million (16%) compared to the same quarter in 2019. Network demand disruptions due to weak Asia import volumes combined with the prolonged shutdown of non-essential retail customers and lower revenue per order, resulted in decreased revenue compared to the same quarter a year ago. Shorter length of haul, driven by a decrease in transcontinental volume and an increase in Eastern volume, contributed to lower revenue per order. Schneider is actively addressing network balance. Intermodal income from operations for the second quarter of 2020 was $11 million, a decrease of $19.5 million (64%) compared to the same quarter in 2019 primarily due to decreased revenues and higher rail costs. Intermodal operating ratio was 95% for the second quarter of 2020 compared to 88.2% in the second quarter of 2019. “Our intermodal segment volume improved in May and June, however, was impacted by reduced Asia import activity and extended nonessential retail shutdowns which resulted in an unbalanced network,” Rourke noted. Logistics revenues (excluding fuel surcharge) for the second quarter of 2020 were $230.9 million, an increase of $3.9 million (2%) compared to the same quarter in 2019, primarily due to increased volume. Logistics income from operations for the second quarter of 2020 was $8.2 million, a decrease of $1 million (11%) compared to the same quarter in 2019 primarily due to lower net revenue per order. Logistics operating ratio was 96.4% in the second quarter of 2020, a sequential improvement of 180 basis points from the first quarter of 2020 due to improved net revenue per order early in the quarter and cost containment actions. “In our logistics segment, operating ratio improved 180 basis points sequentially primarily due to improved net revenue early in the quarter,” Rourke said. “Although uncertainty remains, we have been positioning the company for a second half 2020 freight market with increased demand and constrained supply. It is our current view that the most significant impact of the pandemic on our operations was borne in the second quarter,” he concluded.

OVERLAND PARK, Kan. — YRC Freight, part of YRC Worldwide, has expanded its regional next-day service to the mid-South region of the U.S. as well as to Waco, Texas. This addition of two-day shipping lanes is the latest step in YRC Worldwide’s enterprise network optimization strategy. “Through regional next-day service, our customers in Texas and the mid-South can access just-in-time scheduling that offers benefits of lowered inventory cost and fewer supply chain interruptions,” said Scott Ware, chief network officer. “Results have been very successful since we launched regional next-day service in Texas last fall, and it’s exciting to be expanding the service in six new states.” YRC Freight’s regional next-day service in Texas connects 11 terminals across the state. Locations in the mid-South that are now connected through the network and have access to regional next-day service include Little Rock and Springdale, Arkansas; Springfield, Missouri; Oklahoma City and Tulsa, Oklahoma; Shreveport, Louisiana; Memphis, Tennessee; Jackson, Mississippi; and Texarkana, Texas. YRC Freight is currently performing at or above best-in-class competitors with a 98.5% on-time performance and a claims ratio of 0.13%, according to a statement supplied by the company. “The expansion of regional next-day services is a strategic investment to position YRC Freight for growth, operational improvements and continued responsiveness in servicing our customers with the YRC Worldwide companies’ strong, flexible network,” said Jason Bergman, chief customer officer. “We remain obsessive about providing safe, fast, reliable and high-quality service to our customers.” For more information about YRC Freight’s regional next-day service, click here.

JACKSONVILLE, Fla. — Landstar System Inc. (NASDAQ: LSTR) reported revenue of $824 million for the second quarter of 2020, along with diluted earnings per share of 63 cents. That’s a 21% drop from the $1,045 million recorded during the second quarter of 2019 with diluted earnings per share of $1.53. Gross profit (revenue less the cost of purchased transportation and commissions to agents) was $113.1 million during the second quarter this year, inclusive of the impact of the special pandemic relief payments made to Landstar’s business capacity owners (BCOs) and agents in April and May of 2020. Gross profit was $158.0 million in the second quarter of 2019. “Overall, the resiliency of Landstar’s variable-cost business model performed as expected, given the unprecedented economic decline caused by the (COVID-19) pandemic,” said Jim Gattoni, president and CEO of Landstar. “We entered the 2020 second quarter knowing we would face a very soft freight demand environment as a result of actions taken by governmental authorities and businesses to reduce the spread of COVID-19. As anticipated, demand for freight services slowed significantly and capacity became readily available during the company’s 2020 second quarter, especially in the spot market where the company primarily operates.” According to Gattoni, the number of loads and revenue per load on loads hauled by truck in the second quarter of this year decreased 16% and 7%, respectively, from the same time period last year. The number of loads hauled by truck during April, May and June of 2020 also dropped, 21% for both April and May, and 9% for June. In addition, revenue per loads hauled by truck dropped compared to 2019: by 6% in April and June, and by 9% in May. Truck transportation revenue hauled by independent BCOs and truck brokerage carriers in the second quarter of 2020 was $753.3 million (91% of revenue), compared to $968.2 million (93% of revenue) in 2019. Truckload transportation revenue hauled via van equipment during the second quarter was $483.0 million, down from $605.4 million in the 2019. Truckload transportation revenue hauled via unsided/platform equipment in the 2020 quarter was $247.4 million, down from $338.1 million in 2019. Revenue hauled by rail, air and ocean cargo carriers was $53.8 million (7% of revenue) in the 2020 quarter, compared to $56.8 million (5% of revenue) in the 2019. “The 2020 second quarter presented operating conditions and challenges unlike any other quarter in Landstar’s history. Nevertheless, Landstar did not take any drastic cost reduction measures that could have disrupted our ability to service Landstar’s customers, agents, BCOs or other third-party capacity providers or slow the progress on our technology initiatives,” Gattoni continued. In April the company instituted a pandemic-relief incentive program for its BCOs and agents. Under the program, Landstar paid an extra $50 to each BCO hauling a load as well as to each Landstar agent dispatching the load for every load delivered by a BCO with a confirmed delivery date in April. The program was extended through May. Landstar’s second-quarter report reflects about $12.6 million of payments issued under the program. The company’s gross profit dropped 28% compared to 2019, or 20% excluding the financial impact of the pandemic-relief program, Gattoni noted. During this year’s second quarter, Landstar generated $99.2 million in operating cash flow and paid $7.1 million in dividends. Landstar did not purchase any shares of its common stock during the 2020 second quarter and currently is authorized to purchase up to 1,821,030 shares of the common stock under the company’s share purchase program. As of June 27, the company had $282 million in cash and short-term investments with undrawn revolver capacity under its senior credit facility of $216 million (with the ability to increase to $366 million with the accordion feature included in the company’s senior credit facility). “Although the ultimate impact that the (COVID-19) pandemic will have on the freight transportation industry continues to be unpredictable, we believe Landstar remains in a solid operational and financial position as we enter the third quarter,” Gattoni said.

DEERFIELD, Ill. — Kleinschmidt Inc., a provider of EDI (electronic data interchange) and supply-chain-integration solutions, has announced a technology partnership with Convoy, a digital freight network that uses machine learning and automation to connect shippers and carriers to move millions of truckloads. The collaboration, announced Aug. 5, provides Convoy with EDI connectivity solutions to more deftly satisfy the electronic document requirements of the digital freight process, such as shipper tenders, offer acceptance and invoicing. Through this business connection to shippers and shipping partners, Convoy can refine and expedite sending, receiving, and interpreting documents and data to help carriers find a wider variety of loads. Using a single point-to-point connection to Kleinschmidt, shippers can seamlessly utilize Convoy’s digital freight network to expand capacity, book trucks and track shipments with full support for maintaining the efficiency and standards of their existing EDI and document workflows. Carriers that use Convoy to find and haul loads can, in turn, take advantage of opportunities to identify, bid on and win loads from an expanded array of shippers taking advantage of Convoy’s digital freight network. “Our mission has been to help companies bridge gaps in data within the freight transportation industry,” said Dan Heinen, CEO of Kleinschmidt. “When Convoy approached us to help them fully integrate the traditional EDI document workflow into their transportation ecosystem and application, we jumped at the chance to leverage our expertise in making Convoy’s digital freight process seamless and frictionless for shippers and carriers without interrupting the way they’re currently doing business.”

NORTH LIBERTY, Iowa — Heartland Express Inc. ended the second quarter of 2020 with operating revenues of $160.9 million, compared to $142.1 million in the second quarter of 2019, an increase of $18.8 million, or 13.2%, according to a July 16 statement issued by the company. Operating revenues for the quarter included fuel surcharge revenues of $14.0 million, compared to $18.1 million in the same period of 2019, a $4.1 million decrease, the report noted. Operating revenues increased 18.4%, excluding the impact of fuel surcharge revenues, and increased sequentially during the last five quarters. Heartland’s net income was $19.2 million, compared to $22.4 million in the second quarter of 2019, a decrease of $3.2 million, primarily attributable to a very weak April freight environment and $3.2 million less gains on sale, tax effected. Basic earnings per share were $0.24 during the quarter. Operating income for the three-month period ending June 30 decreased $4 million primarily due to lower gains on sale of revenue equipment. The company posted an operating ratio of 84.5%, non-GAAP adjusted operating ratio of 83.0%, and a 11.9% net margin (net income as a percentage of operating revenues) in the second quarter of 2020 compared to 79.6%, 76.6%, and 15.7%, respectively, in the second quarter of 2019. “Our operating results for the three and six months ended June 30, 2020, showed strength in terms of profit and overall operating efficiency during these volatile and challenging times,” noted Mike Gerdin, Heartland’s CEO. “We continue to be most proud of our drivers and our team of employees that support them and our loyal customers each day.” For the six-month period ending June 30, the company reported a net income of $32.4 million with basic earnings per share of 40 cents; operating revenue of $327.2 million (an increase of 16.2% over 2019); operating income of $42.3 million; and an operating ratio of 87.1% (85.6% non-GAAP adjusted operating ratio). “From a financial perspective, we were able to capitalize on our fifth consecutive quarter of growth in revenue before fuel surcharges and strong cost controls to deliver an operating ratio of 84.5% and a non-GAAP adjusted operating ratio of 83.0% despite lower gains on sale of revenue equipment, and ongoing progress needed to apply our cost structure to the Millis Transfer business,” Gerdin said. “From a market perspective, the quarter started off with weak freight demand in April and then strengthened each month during the quarter,” he continued. “This trend has continued through the first two weeks of July. We continue to be very pleased with the Millis Transfer acquisition, as revenue retention has been favorable, and we still have significant additional operating efficiencies to pursue.” As of June 30, Heartland recorded $82.5 million in cash balances, with no borrowings under the company’s unsecured line of credit. The company had $88.5 million in available borrowing capacity on the line of credit on June 30, after consideration of $11.5 million outstanding letters of credit. In addition to the current borrowing base of $100 million, the Company has the ability to increase the available borrowing base by an additional $100 million, subject to normal credit and lender approvals. The company continues to comply with associated financial covenants, and ended the quarter with total assets of $930.5 million and stockholders’ equity of $702.6 million. The average age of Heartland’s tractor fleet was 2.1 years as of June 30 compared to 1.5 years at the end of the second quarter of 2019, and the average age of company’s trailer fleet was 3.7 years compared to 3.2 years in 2019. The company anticipates a total of $60 to $70 million in net capital expenditures for the remainder of calendar year 2020, and expects to record gains on sale of revenue equipment of $8 to $9 million, the report says. “We have once again proven that Heartland Express can generate and preserve cash from operations and make disciplined operating decisions to navigate the ups and downs that are inherent in our industry,” Gerdin said. “We believe Heartland Express is well positioned to navigate a volatile freight market, changing customer needs and relationships, and an uncertain economic landscape in the months ahead,” he concluded. “We thank the truck drivers of America for keeping the flow of critical goods and the economy moving during these challenging times.”

NORTH LIBERTY, Iowa — Heartland Express Inc. has received two service awards from FedEx Express for fiscal year 2020 (June 1, 2019 through May 31, 2020). The Iowa-based carrier, which serves customers with shipping lanes throughout the U.S., was recognized with FedEx Express’ Platinum Award for 99.96% On-Time Service and the Core Carrier of the Year award. “To receive both of these awards from one of Heartland Express’ top customers for multiple years is truly an honor and speaks to Heartland’s motto of ‘Service for Success,’” said Mike Gerdin, CEO of Heartland Express. Heartland Express has received the Core Carrier of the Year” award from FedEx Express 13 times in the last 14 years. This year’s recognition has earned Heartland Express the title for 10 years in a row. Heartland Express has reached nearly perfect service levels, at 99.96% on time, for more than 17,000 shipments during the fiscal year. “This year specifically, was one of the most difficult and challenging years given the impacts of COVID-19 on our country. The truck drivers of America banded together to ensure critical shipments and the American supply chain kept moving at all times,” Gerdin said. “The level of service that is represented by these awards was crucial for our nation during these uncertain times but is the same level of service that this partnership has delivered since 2002,” he continued. “The collective collaboration among the employees of Heartland Express and FedEx Express is truly amazing, and we look forward to many more successful years together.”

FORT SMITH, Ark. — The COVID-19 pandemic significantly impacted second-quarter business levels and financial results for ArcBest but asset-based and asset-light cost management partially offset the effects of the declines, according to a quarterly report released by the company July 29. The company reported second-quarter 2020 revenue of $627.4 million compared to second-quarter 2019 revenue of $771.5 million. Second-quarter 2020 operating income was $20.4 million compared to operating income of $35.2 million in the same period last year. Net income was $15.9 million, or 61 cents per diluted share, compared to second-quarter 2019 net income of $24.4 million, or 92 cents per diluted share. ArcBest’s non-GAAP operating income was $25.1 million during this year’s second quarter compared to $38.8 million in the second quarter of 2019 non-GAAP. On a non-GAAP basis, net income was $17.6 million, or 67 cents per diluted share in this year’s second quarter compared to a net income of $27.4 million, or $1.04 per diluted share during the same time period last year. On June 30, 2020, ArcBest’s consolidated cash and short-term investments, less debt, were $41 million net cash compared to the company’s $3 million net debt position on March 31, reflecting a $44 million improvement during the second quarter. “The successes of the second quarter are rooted in the strength of our employees and the culture that we have cultivated here that unites all of us behind a set of shared values that drive excellence” said Judy R. McReynolds, chairman, president and CEO of ArcBest. “I am incredibly proud of our employees, especially our front-line teams, who continue to work hard and serve our customers in the face of a global pandemic that continues to affect so many aspects of the economy.” Other highlights from the report include these asset-based comparisons of the second quarter of this year to the second quarter of 2019: Revenue of $460.1 million compared to $559.6 million, a per-day decrease of 17.8%. Total tonnage per day decrease of 13.8%, with a double-digit percentage decrease in both less-than-truckload-rated tonnage and truckload-rated spot shipment tonnage moving in the asset-based network. Total shipments per day decrease of 13.3%; total weight per shipment decrease of 0.6% and an increase of 0.9% in less-than-truckload-rated weight per shipment impacted by transactional, less-than-truckload-rated shipments added during the second quarter. Total billed revenue per hundredweight decreased 4.0% and was negatively impacted by lower fuel surcharges versus prior year. Excluding fuel surcharge, less-than-truckload-rated freight experienced a percentage increase in the low-single digits. Operating income of $21 million and an operating ratio of 95.4% compared to the prior year quarter operating income of $36.2 million and an operating ratio of 93.5%. On a non-GAAP basis, operating income of $25.8 million and an operating ratio of 94.4% compared to the prior year quarter operating income of $38.9 million and an operating ratio of 93.0%. In response to significantly lower shipment and tonnage levels related to the pandemic’s impact on customer shipping patterns, asset-based system labor and other resources were managed down to match business levels. Second-quarter business decreases were somewhat mitigated by the continued addition of spot, truckload-rated shipments and transactional LTL-rated shipments throughout the Asset-Based network. Combined with the cost reductions in place, the handling of these additional transactional shipments contributed to improved operational efficiencies, fewer empty miles and lower costs. Total second-quarter revenue per hundredweight decreased due to freight mix changes related to the addition of these transactional shipments. However, total yield on less-than-truckload-rated shipments, excluding changes in fuel surcharge, was positive versus the prior year. Pricing on ABF Freight’s traditional published and contractual business improved as the transportation marketplace’s rational pricing environment continued. Asset-light figures for 2020’s second quarter compared to the second quarter of 2019 include: Revenue of $197.9 million compared to $232.9 million, a per-day decrease of 15%. Operating income of $2.1 million compared to operating income of $3.1 million. Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) of $4.9 million compared to adjusted EBITDA of $6.5 million. Second quarter revenue in the Asset-Light ArcBest segment decreased compared to the prior year period primarily due to lower demand in both the expedite and truckload brokerage businesses related to the pandemic. Reduced demand for expedited services was related to customer closures in the auto sector for the majority of the quarter and meaningful reductions in business levels for many manufacturing customers. Revenue reductions in truckload brokerage were the result of fewer total shipments combined with lower average revenue per shipment. The second quarter was highlighted by significant revenue growth in managed transportation services, consistent with the positive trend seen for the past several quarters in this portion of ArcBest’s Asset-Light business. Purchased transportation expense in the second quarter, as a percent of revenue, increased 120 basis points compared to the prior year period reflecting changes in business mix and the market effects of reductions in revenue per shipment that exceeded comparable decreases in purchased transportation expense. In the second quarter of 2020, operating results for the Asset-Light ArcBest segment benefitted from the corporate cost reduction initiatives previously announced in early April. At FleetNet, a decrease in total events, primarily associated with fewer roadside repairs due to the pandemic, contributed to lower total revenue and reduced operating income compared to the prior year period. In late March and early April, ArcBest took actions designed to mitigate the operating and financial impact of the COVID-19 pandemic: The company drew down $180 million of its senior secured revolving credit facility and borrowed $45 million under its account- receivable securitization program. Because of this, ArcBest’s net cash position improved $44 million since March 31, and customer account payment trends have stabilized. The company is now reviewing options for paying back the incremental borrowings during third quarter of this year. In addition, ArcBest implemented cost reductions beginning in April that included a 15% decrease in the salaries of all nonunion employees; suspension of the employer match of ArcBest’s nonunion 401(k) Plan; a 15% decrease in the fees paid to ArcBest’s board members and the board committee chairpersons; along with other cost reductions. When compared to second quarter 2019, these compensation-related reductions resulted in savings of about $15 million during the second quarter. These cost reductions, along with using real-time, technology-enabling data to align operational costs with business levels, contributed to the positive second quarter financial results. “As an essential business, our employees have worked on the front lines in sacrifice, both personally and financially, to serve our customers and our nation. We value our employees and appreciate their efforts and are pleased to now be able to restore full wage levels,” McReynolds said. “I am pleased with what we have been able to accomplish over the last three months considering the dynamic nature of circumstances surrounding the COVID-19 pandemic,” she continued. “We are working to carry this momentum forward as the second half of the year unfolds and will, as always, monitor trends and make adjustments where necessary.” To view the entire report, click here.

THOMASVILLE, N.C. — Last week Old Dominion Freight Line Inc. (ODFL) released financial results for the three- and six-month periods ending June 30. Prior-period share and per share data in the report has been adjusted to reflect the company’s March 2020 three-for-two stock split. “The second quarter of 2020 was one of the most difficult periods we have experienced, although our ream responded quickly to efficiently manage our operations in this environment,” said Greg Gantt, president and CEO of ODFL, referring to the impact of the global COVID-19 pandemic on the company. “Given the circumstances with the domestic economy, the decrease in our quarterly revenue was not entirely unexpected. Our overall financial results for the quarter were solid, however, as we continued to execute on the basic elements of our long-term strategic plan,” he continued. “We improved our industry-leading service metrics that support our revenue quality initiatives, and we also balanced our operating costs with the decrease in volumes.” Despite the difficulties involved in operating a business during COVID-19, Gantt said ODFL continued to provide superior customer service, establishing a new company-record quarterly cargo claims ratio of 0.1% and maintaining on-time deliveries at 99%. Gantt attributed the drop in revenue during this year’s second quarter, compared to the second quarter of 2019, to a 12.1% decrease in less-than truckload (LTL) tons per day and a 3.8% decrease in LTL revenue per hundredweight. “Revenue per hundredweight was negatively affected by the significant decline in the average price of diesel fuel and the 5.3% increase in our average weight per shipment, which generally has the effect of reducing revenue per hundredweight,” he said, adding that, excluding fuel surcharges, ODFL’s LTL revenue per hundredweight decreased 0.5% compared to 2019. In addition, changes in the company’s mix of freight resulted in a negative impact on yield metrics, but Gantt said the company’s underlying pricing performance remained consistent with prior periods. “We intend to maintain our long-term and consistent approach to pricing, as we believe this approach supports our ability to achieve long-term profitable growth,” he said. During April, the company experienced a significant decrease in revenue per day, which Gantt attributes to shelter-in-place orders issued around the country. “As these stay-at-home mandates were phased out and our customers began to reopen their businesses, our revenue trend improved on a sequential basis for the remaining months of the quarter,” he noted. “Although year-over-year volumes decreased for both May and June when compared to the same periods of 2019, we were encouraged by the sequential improvement in our volumes that has also continued into July.” ODFL’s operating ratio showed a slight improvement during the second quarter, rising from 77.8% to 77.9%. “This improvement in our direct costs more than offset the increase in overhead costs as a percent of revenue,” Gantt said. “We attribute the increase in our overhead costs as a percent of revenue to the deleveraging effect associated with the reduction in revenue, despite our diligence in controlling our discretionary spending,” he explained. “While we were pleased with the improvement in our operating ratio during the quarter, we were careful to balance short-term cost decisions in a challenging economic environment against the long-term needs of our business. As a result, our service advantage and available capacity position us to capitalize on future revenue growth opportunities.” ODFL’s net cash provided by operating activities was $312.2 million for the second quarter of 2020 and $516.2 million for the first half of the year. The company had $518.6 million in cash and cash equivalents on June 30. Capital expenditures were $67.9 million for the second quarter of 2020 and $120.1 million for the first half of the year. ODFL expects its aggregate capital expenditures for 2020 to total approximately $265 million, including planned expenditures of $195 million for real estate and service-center expansion projects; $20 million for tractors and trailers; and $50 million for information technology and other assets. The company returned $146.1 million of capital to its shareholders in the second quarter of 2020 and $342.7 million for the first half of the year. For the year-to-date period, this total consisted of $306.8 million of share repurchases and $35.9 million of cash dividends. “Old Dominion’s second quarter results are a testament to the resiliency of our business model and the consistent execution of our strategic plan. We remain committed to ensuring the safety and well-being of our OD Family of employees, who in turn remain dedicated to providing our customers with superior service at a fair price,” Gantt said. “This value proposition differentiates us from our competition and is critical to our ability to win market share. We are encouraged by recent trends and will continue to invest in the necessary elements of capacity to support our customers’ needs,” he said. “Our long-term record of success throughout the various stages of the economic cycle provides us with confidence that executing on the fundamental aspects of our business can deliver additional value to our shareholders.”

WASHINGTON — The Owner-Operator Independent Drivers Association (OOIDA) has asked Congress to provide economic relief to struggling small-business truckers by suspending the Heavy Vehicle Use Tax (HVUT) for one year as part of the next COVID-19 response package. “Truckers are still on the front lines, filling store shelves and supplying hospitals,” said Todd Spencer, president of OOIDA. “Suspending the HVUT is a way that Congress could easily offer fast, direct relief to all motor carriers. And believe me, they need it, much more than just a ‘thank you.’” On July 30, OOIDA sent a letter to both House and Senate leadership, expressing concerns about how the economic downturn has lowered freight rates and created uncertainty for those who have put their own well-being on the line to do their jobs. The HVUT is an annual fee for trucks weighing more than 55,000 pounds and typically costs about $550 per truck. OOIDA noted that, compared to lifting the federal excise tax (FET), suspending the HVUT for 12 months is a more immediate and equitable way to provide assistance to the trucking industry as a whole, because suspending the FET would only benefit motor carriers that are in a position to purchase new equipment. “Congress and the American public have heaped praised on truckers for their work on the front lines of this crisis,” Spencer said. “This action would provide tangible, meaningful help to carriers of all sizes, not just those large enough to have the resources to afford new equipment in the midst of an historic economic downturn.” To view OOIDA’s letter, click here.