Less-than-truckload carrier XPO saw recent volume wins from Yellow’s departure stick in August. Tonnage was up 3.1% 12 months over 12 months (y/y) in the course of the month following a 4.2% increase in July. The increases were the mix of high-single-digit growth in shipments partially offset by mid-single-digit declines in weight per shipment.
Most carriers have seen lighter shipment weights throughout the softer demand environment.
XPO (NYSE: XPO) has been taking market share inside its local accounts, which are sometimes smaller and more impacted by macroeconomic changes than its larger shippers. Because the economy softens, the group tends to maintain shipment counts level but fewer pallets get shipped in each load. Nonetheless, on a two-year stacked comparison, XPO’s tonnage appeared to extend from July to August.
XPO’s tonnage was down nearly 3% y/y within the third quarter last 12 months but improved because the quarter progressed, turning positive by September. The turnaround was tied to market share wins, notably in areas where the corporate had added or expanded terminals, in addition to a rise to its sales force.
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Every major carrier has seen shipments improve following the shutdown of Yellow Corp.
Saia (NASDAQ: SAIA) recently noted a 13% y/y jump in shipments in the primary two weeks of August, and ArcBest (NASDAQ: ARCB) said shipments at its core accounts have improved roughly 20% since June (but were up just 3% in total during August).
Freight began fleeing Yellow’s network in mid-July when the corporate said it wouldn’t give you the chance to make required advantages payments. Its union workforce threatened to strike and customers quickly sought other options for capability.
XPO said on its second-quarter call a month ago that shipments per day increased between 3,000 and 4,000 (on a 50,000 per-day run rate) from the start to the tip of July. It appears the brand new every day run rate held regular through August.
Even with the rise in volumes, the carrier noted an improvement in its damage claims ratio in the primary two months of the third quarter in comparison to the second quarter.
XPO doesn’t provide yield metrics in its intraquarter updates. It guided to a 3% y/y increase in yields (excluding fuel) on its second-quarter call.
The corporate continues so as to add capability to the network.
XPO also announced Tuesday the completion of an expansion project that added 58 recent doors to a terminal near Dallas. The project is a component of a two-year growth plan that can add 900 recent doors on a net basis to its network by the primary quarter of next 12 months. It opened six recent service centers last 12 months and has expanded capability at three other terminals up to now this 12 months.
On the second-quarter call, the corporate said that excess capability within the network had been reduced to a midteen percentage, lower than a desired level of roughly 20% prior to Yellow’s exit. On the time, it said it might have so as to add terminals and equipment to satisfy the increased need but that any recent freight it onboarded would need to be accretive to margins.
Most growth-oriented carriers are proactive, adding incremental infrastructure ahead of demand. XPO has accomplished roughly half of its growth plan.
- August transportation prices decline at slowest pace in a 12 months
- MFN Partners attempting to protect equity investment in Yellow
- ArcBest sees 20% increase in shipments at core accounts
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