From an overall industry perspective, the American Trucking Associations said trucking volumes (including LTL) were up 4.3% in April year-over-year, 6.5% in May and 5.9% in June, much stronger than most of the carriers in our group reported.
For example, Swift saw a rise of just 2.1% in loaded miles in Q2, which seemed about on par with most others. It could be, however, that part of the delta between ATA tonnage figures and carrier reports might be explained by growth in dedicated carriage, which is generally reported as a different segment than straight truckload business.
And the evolution of many carriers away from straight truckload to dedicated, intermodal and brokerage services continues apace at many in the industry.
Most notable, of course, at JB Hunt, where the truckload business continued its freefall in Q2, down more than 19% in revenue, and at a little over $100 million in sales accounts for just 7% of total revenues, down from 10% in 2012. The story is even more dramatic in terms of profits, where the truckload segment produced just 2% of total profits versus a still tiny 7% in Q2 last year.
But it isn't only happening at Hunt, even if this is the extreme case. Straight truckload revenues fell 3.6% in Q2 at Werner, while dedicated and intermodal segments rose a combined 7.1%. The truckload business at Knight fell 2.6 in Q2, but its brokerage business soared a robust 64%, though off a small base, and now accounts for about 20% of total revenue.
In terms of pricing, the Cass Linehaul Index shows that rates, while falling versus Q1 as is typical, were consistently about 2% above 2012 levels. That would seem at the high end of the range of our carrier group, which reported modest rate increases of 1-1.5% for the most part.
All told, it was a decent quarter for the TL carriers, with total revenues including fuel surcharge up 4.5%, while profits were up a decent 6.2% in aggregate, as shown in the table below.
Truckload Carrier Q2 2013 Results
But as can be seen, results varied quite a bit across carriers. Revenue fell 3-4% at Werner and Heartland while soaring 10% at JB Hunt, as usual on the back of its intermodal and brokerage
segments. Revenue was up 3-4% at all the rest.
Profits were an even more unequal story, dropping sharply at Werner and Celadon, rising rapidly at Hunt, Heartland and Swift, and coming in nearly flat at Marten and Knight.
Unweighted (meaning size of revenues is not considered) operating ratios (operating expense divided by operating revenues) came in for the group at about 88%, a little above 2012 and decent
but not outstanding performance.
Results for the first half of the year, as shown in the table below, are largely the same as for Q2. Pure trucking revenue remains very flat for the group, while most see a lot more growth from intermodal and other value-added services.
Total net income was up a strong 13.2% for the group, led by Swift, up 66%.
Noteworthy management comments from the carriers from their Q2 earnings releases are as follows:
Werner
Average revenues per total mile, net of fuel surcharge, rose 1.6% in second quarter 2013 compared to second quarter 2012. Base rate increases showed modestly positive momentum as the second
quarter 2013 progressed.
Spot market rates were lower in second quarter 2013 than in second quarter 2012 due to lower transactional project business, particularly in the Midwest market.
Noted that it is very difficult for many smaller and medium size private carriers to replace their older, lower-value trucks with much higher cost, EPA-compliant new trucks, which significantly reduces the risk of trucks being added to the market, as capacity overall remains flat.
JB Hunt
Load growth of 12% in Intermodal (JBI) and 29% in Integrated Capacity Solutions (ICS), helped drive a 12% and 20% increase in segment revenue, respectively.
Hunt's Dedicated Contract Services (DCS) segment revenue increased by 13% as new, large private fleet conversions continue to be implemented at shippers.
In the truckload segment, rate per mile, excluding fuel surcharges, increased 2.1% on a 10% shorter length of haul. However, rates from consistent shippers decreased 0.6% compared to the same quarter a year ago in order to retain business that fell within profitable network lanes.
Heartland
The average age of the company's tractor fleet was 2.0 years as of June 30, 2013 compared to 2.2 years as of June 30, 2012. Heartland took delivery of 190 new trucks during the second quarter which included International ProStar Plus and Freightliner Cascadia models.
The tractor fleet upgrade will continue through the second half of 2013 with the scheduled purchase of an additional 800 units. The average age of the company's trailer fleet was 3.2 years at June 30, 2013 compared to 3.5 years at June 30, 2012, with 98% of its trailers being 2007 models and newer at the end of the quarter.
Knight
Company said the industry continues to be faced with a shortage of high quality driving associates, and that "Sourcing and retaining high quality drivers is paramount to our success in improving the productivity of our assets."
Knight said it believes its decentralized regional service centers provide a ''hometown'' feel that affords it a significant advantage in recruiting, retaining, and developing drivers.
Average tractor count for the quarter decreased 107 trucks, year-over-year, to 3,963 tractors.
Seems to have a large focus on growing its non-asset (brokerage) business.
Revenue per loaded mile, net of fuel surcharge, increased just less than 1.0% while length of haul and miles per tractor were virtually flat.
Marten
Total truckload, intermodal and broker loads were up 13.2% in the second quarter of 2013 over the prior year's quarter. This represents one of the strongest volume improvements in the group, implying solid market share gains.
Swift
Described Q2 as a " a relatively lackluster freight environment." Said Q2 marked "the 6th consecutive quarter, and the 14th of the last 15 quarters, where our team has been able to improve the year over year loaded utilization in our truckload segment."
At 10,903, total tractors available are down significantly from the 12,132 the company operated in Q2 2011.
Source: SCDigest