Old Dominion Freight Line reported a modest improvement in metrics during February but said market conditions “proceed to reflect softness within the domestic economy.”
The less-than-truckload carrier saw revenue per day increase 1.2% 12 months over 12 months (y/y) during February, following a 2.7% decline in January. Tonnage was down 3% as a slight increase in shipments was offset by a 3.2% decline in weight per shipment. January saw a 2.3% decline in shipments while shipment weights were 3.2% lower.
January was a tougher-than-normal month for carriers as severe winter storms forced terminal closures, leading to some shipments getting pushed to February. Old Dominion (NASDAQ: ODFL) also had a better y/y tonnage comp in February (down 12.4% a 12 months ago) in comparison with January (down 7.8%).
The carrier continues to see favorable yield results because it stays one of the price-disciplined operators within the business. Revenue per hundredweight was 3.7% higher y/y for the primary two months of the primary quarter and seven.1% higher when excluding fuel surcharges.
“The rise in our LTL revenue per hundredweight was supported by a good pricing environment and our ongoing ability to deliver superior service at a good price,” said Marty Freeman, Old Dominion’s president and CEO, in a Tuesday news release.
The lower shipment weights have been a contributor to the improving yield metrics.
On its fourth-quarter call at the tip of January, Old Dominion said it had roughly 30% excess capability to accommodate future volume growth. It hasn’t been adding terminals at a high clip like a few of its competitors, that are seizing on a chance following the shutdown of Yellow Corp. (OTC: YELLQ).
Saia Inc. (NASDAQ: SAIA) reported Monday a 19% y/y jump in shipments during February, which followed a 12% increase in January. The corporate acquired 28 terminals from the bankrupt estate and plans to spend greater than $500 million on real estate in 2024. It expects to extend door count by 12% to 14% throughout the 12 months.
Old Dominion plans to leverage the $2 billion it has invested in real estate over the past decade to attain its growth goals. The corporate has a track record of winning market share when the freight cycle turns positive. On the January call, it said it had outperformed market growth rates by 600 to 1,000 basis points on average in prior cycles, noting a midteens advantage throughout the 2021 freight boom.
“We imagine our worth proposition is unmatched within the marketplace, which provides us with an amazing opportunity to win market share and produce strong, profitable growth once the macroeconomic environment begins to enhance,” Freeman concluded.
The carrier has easier comps on the horizon than most of its peers. In the course of the 2023 second quarter, it recorded midteen tonnage declines every month versus the industry, which was down only barely.
Shares of ODFL were down 2.8% at 1:50 p.m. EST on Tuesday in comparison with the S&P 500, which was down 1.1%. Saia was up 3% on the time.
More FreightWaves articles by Todd Maiden
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