Latest news with #KnightSwift
Yahoo
26-07-2025
- Business
- Yahoo
Knight-Swift makes big gain in TL profits despite revenue slip
This story was originally published on Trucking Dive. To receive daily news and insights, subscribe to our free daily Trucking Dive newsletter. Dive Brief: Knight-Swift Transportation Holdings' consolidated operating income increased 14.4% to $72.6 million in Q2 compared to a year ago, the trucking giant announced Wednesday in an earnings release. Its truckload segment made the most gains in that metric for the quarter, while its less-than-truckload segment saw a substantial drop compared to Q2 2024. The company's intermodal business also had an operating loss worsen. 'Overall, most segments experienced pressure on revenue year over year with a soft freight environment,' CFO Andrew Hess said in an earnings call Wednesday. Segment Q2 2025 Q2 2024 Percent change TL $45.4 million $23.5 million 93.4% LTL $18.3 million $33 million Negative 44.5% Logistics $5.5 million $4.8 million 16.6% Intermodal Negative $3.4 million Negative $1.7 million Negative 99.7% All other $6.7 million $3.9 million 73.6% SOURCE: Knight-Swift Q2 2025 earnings release, presented by generally accepted accounting principles Dive Insight: U.S. tariff policy spurred volatile freight flows, requiring agility from Knight-Swift businesses that its workforce delivered, CEO Adam Miller said on the earnings call. The 'import cliff that many anticipated' was limited, but there was a general softness in freight demand for most of Q2, especially on the West Coast, he said. 'Given this backdrop, we are pleased that our truckload business was able to prevent a deeper decline in revenues while growing margins and operating income meaningfully year-over-year,' Miller said. Truckload revenue decreased 2.7% in Q2 to under $1.1 billion, excluding fuel surcharges and intersegment transactions. Nevertheless, the West Coast import volume decline hit the company's intermodal segment most, prompting a 13.8% revenue decline YoY, Treasurer and SVP of Investor Relations Brad Stewart said on the call. 'As part of our efforts to improve the cost structure, we converted to private chassis in five markets during the quarter, completing an initiative we began early this year,' he said. Meanwhile, LTL is still integrating its acquisition of the less-than-truckload division of Dependable Highway Express as well as digesting costs from recently opened facilities, according to the earnings release. The company could add some new terminals in strategic places to that network this year, Miller said. Other trucking firms reported various challenges in Q2. Heartland Express' operating revenue declined 23% to $210 million. Covenant Logistics Group had flatter revenue for its combined TL segments of expedited and dedicated. 'We believe that general freight market fundamentals are slowly improving, although progress is uneven,' Covenant CEO and Chairman David Parker said in an earnings release, projecting that clearer trade policies in the future could help demand. Recommended Reading Weak demand, oversupply dent Marten Transport's Q2 earnings
Yahoo
24-07-2025
- Business
- Yahoo
Five takeaways from the State of Freight for July: What earnings and the indices are saying about the market
Tariffs have been a major focus of recent installments of FreightWaves' monthly State of Freight webinar, held in conjunction with SONAR, but they took a back seat this month to various data points. What those data points are saying–whether they are about company finances or numbers on demand and capacity–was the focus of the July webinar with FreightWaves and SONAR CEO Craig Fuller and Zach Strickland, SONAR's director of freight market intelligence. Here are five takeaways from Thursday's session. One index rising, the other falling Two trends are showing up in SONAR data that at times can reflect a degree of correlation but isn't doing so now: the outbound tender rejection index (OTRI) is rising, while the outbound tender volume index (OTVI) is falling. The OTVI is reflecting what might be expected given that everybody in the sector still sees the freight market in some degree of a recession. But the OTRI is rising, a sign of tightening capacity as independent owner operators take their trucks off the road and fleets continue to disappear, not able to survive current conditions. Fuller said capacity had been on an upswing for several years, 'with a flood of new participants, companies and truck drivers.' But Strickland showed a chart showing recent increases in net revocations of motor carrier authorities granted by the Federal Motor Carrier Safety Administration (FMCSA). Fuller said he believed enforcement of the English-language only was having just a 'fractional' impact on capacity. But it could become a significant issue if there is a rebound in the housing market that leads to more trucking demand. Strickland and Fuller discussed possible other reasons for the rise in revocations, including impacts from the Drug & Alcohol Clearinghouse. 'This is an ongoing thing that we really need to pay attention to,' Strickland said. Earnings season and what it is saying The July State of Freight webinar occurred in the middle of numerous transportation companies releasing their quarterly reports. The performance of a few companies came in for discussion, including Heartland Express (NASDAQ: HTLD), which posted yet another quarterly loss Thursday. Fuller noted that Heartland's acquisitions over the years have been in the commodity truckload business, 'based on a 1990's long haul business that is no longer there.' He also spoke from personal experience as a member of the family that founded U.S. Xpress, whose profile and financial troubles were similar to what Heartland Express is going through. U.S. Xpress eventually was purchased by Knight Swift. 'The long haul business is dead for those truckload operators,' Fuller said. 'Unfortuantely, Heartland just can't seem to get a handle on that.' U.S. Xpress is now a division of Knight Swift (NYSE: KNX). In Knight Swift's second quarter earnings report, the company said U.S. Xpress had seen its operating margin improve by 300 basis points over the last year. 'Knight Swift has really proven that it can bring U.S. Xpress back to some level of sustainability,' Fuller said, noting the contrast with Heartland's struggles. Short haul ascendant The discussion about Heartland's ties to long haul truckload activity led Strickland to pull up a chart from SONAR showing its index for short haul versus long haul activity. Generally, long haul runs at a higher index, but that has flipped in recent months. The data comes from tenders. Long haul business is anything over 800 miles, Strickland said. Fuller said he believes the shift is part of a longer term trend. But he also said he believes the sort of reindustrialization of the U.S. economy being pursued by the Trump administration could reverse that change. But there's a risk for trucking, he said. As the long haul sector of the freight market becomes more dependent on import activity, 'then a lot of that is going to be containerized and going to go on the railroads.' Across the country on one company's set of tracks With negotiations ongoing between Norfolk Southern (NYSE: NSC) and Union Pacific (NYSE: UNP) that would create the country's first true transcontinental railroad, the impact on the transportation sector became a topic of discussion. Describing railroads as a 'dream business,' Fuller noted that Union Pacific profitability has exceeded that of Microsoft at times. 'The consolidation ends up making them that much more profitable,' he said. As to the question of who else might benefit from a consolidation besides the railroads, Fuller said 'I would argue that rarely does a real merger benefit the shippers.' However, a consolidation between the two railroads, UP in the west and NSC in the east, would likely aid large shippers like Amazon. . Owner operators and brokers would likely lose, he said, but he added that large intermodal carriers such as J.B. Hunt (NASDAQ: JBHT) or HubGroup (NASDAQ: HUBG) would benefit. 'I think the traditional railroad shippers, the big commodity players like coal or grains, they probably lose because the service quality will likely deteriorate for them. But it should improve for intermodal.' A revival of freight tech Fuller said that 'one of the most exciting things happening at freight now' is a revived interest in freight technology. Prior to the pandemic, Fuller said there were a slew of technology vendors offering new products, backed by venture capital. In his discussion, he only mentioned one specific company that has been active: Triumph Financial (NASDAQ: TFIN), which bought Greenscreens AI earlier this year and is looking to expand its Intelligence division. But beyond that, he said, 'there's just a lot of deal flow happening.' He described much of the activity as being around 'next generation' technology, like freight tech powered by AI. More articles by John Kingston Yet another broker liability case, this time in the Fifth Circuit, adds to the growing mix Much happened at Triumph Financial during the quarter; USPS dispute settled Supply chain software provider Manhattan Associates soars after strong revenue growth The post Five takeaways from the State of Freight for July: What earnings and the indices are saying about the market appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-07-2025
- Business
- Yahoo
Knight-Swift's belt tightening offsets soft demand
Knight-Swift Transportation said it's focused on cost control as it awaits a material inflection in demand. While management is 'still cautious' it noted that customer conversations are a little more stable now that tariff concerns are easing. The Phoenix-based transportation and logistics provider reported second-quarter adjusted earnings per share of 35 cents, which was in line with management's prior guidance (30 to 38 cents), 2 cents ahead of the consensus estimate and 11 cents higher year over year. Consolidated revenue was 1% higher y/y at $1.86 billion (2% higher excluding fuel surcharges). An adjusted operating ratio (inverse of operating margin) of 93.8% was 80 basis points better y/y. The adjusted EPS result excluded expenses tied to past acquisitions, asset impairments and severance costs. The number included gains on equipment sales of $11.7 million, a $5.7 million y/y increase, or a 3-cent tailwind. A lower tax rate in the period provided a 2-cent tailwind. Tractor utilization improves again, still waiting on demand Knight-Swift's (NYSE: KNX) truckload revenue fell 3% y/y to $1.07 billion as average tractors in service fell 7% but revenue per tractor was up 4%. Loaded miles per tractor improved 4%, largely due to the company's tractor utilization initiatives, with revenue per loaded mile (excluding fuel) coming in flat y/y at $2.74. This was the eighth consecutive quarter of y/y improvement in miles per tractor. Revenue per mile dipped 4 cents from the first quarter but management said the metric has improved modestly in recent weeks. Contractual rate increases again averaged low- to mid-single-digits. The TL segment reported a 94.6% adjusted OR, 260 bps better y/y but only 100 bps improved from the seasonally weak first quarter. Turnaround efforts at U.S. Xpress drove 300 bps of margin improvement at that fleet. Management expects modest sequential improvements in TL revenue and margin in the third quarter. LTL results suffer from front-loaded growth costs, but margins to improve in back half The less-than-truckload unit reported a 28% y/y revenue increase to $338 million, largely due to the acquisition of Dependable Highway Express (DHE) nearly one year ago. Shipments per day were up 22% with revenue per hundredweight, or yield, up 10% y/y (excluding fuel surcharges). The yield metric benefitted from a 3% decline in weight per shipment and a 14% increase in average length of haul. However, contractual rate negotiations produced mid- to high-single-digit increases in the period. The LTL unit reported a 93.1% adjusted OR, which was 720 bps worse y/y. Knight-Swift cited DHE integration costs and startup expenses at new terminals as the headwinds. It opened three new terminals in the quarter and moved another facility. Door count is up 8% year to date (28% higher y/y in the quarter). Management forecast 100 to 200 bps of sequential OR improvement and said a variety of cost initiatives and technology enhancements should allow it to buck the typical sequential trend of margin degradation in the second half of the year. Intermodal losses to narrow Knight-Swift's intermodal segment was unprofitable for a ninth consecutive quarter, reporting a 104.1% OR. Loads were off 12% y/y and revenue per load was down 2%. The company said it walked away from some business that had inferior pricing during the period. The company expects a high-single-digit sequential increase to intermodal load counts in the third quarter given recent award activity. Cost reductions and a move to private chassis are expected to narrow the operating losses at the unit. Knight-Swift guided adjusted EPS of 36 to 42 cents for the third quarter, which bracketed Yahoo Finance's consensus estimate of 38 cents at the time of the print. It didn't provide a fourth-quarter outlook because of uncertainty around U.S. tariff policy. More FreightWaves articles by Todd Maiden: FedEx Freight gives shippers 'more time' to adjust to new LTL class rules New LTL freight class rules take effect on Saturday ArcBest CEO Judy McReynolds to retire The post Knight-Swift's belt tightening offsets soft demand appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
21-03-2025
- Business
- Yahoo
Carriers big and small at TCA wait for signs of freight market turnaround
PHOENIX – If there was a freight market bull at the annual meeting of the Truckload Carriers Association, that person was keeping pretty quiet. Conversations from the stage, at receptions and at meals had a consistent theme: Can you believe we're still talking about this freight recession? In 2025? Didn't we say at this meeting last year that things would be better by the end of 2024? At the Large Carrier panel, Dave Williams, senior vice president of equipment and government relations at Knight Swift (NASDAQ: KNX), summed up the sentiment heard so often at the conference.'We had expected to see a recovery,' Williams said. 'We had expected things to turn by now. In fact, some of our businesses saw the signs of a meaningful recovery in December and January, and then things kind of turned after that.' Then Williams said what could have been the motto of the TCA conference: 'I think we're all a little bit flabbergasted on how long this has lasted.' Whether at the Large Carriers panel Tuesday or the Small Carriers panel the day before, the theme on current market conditions seemed to be summed up by Steve Brookshaw, senior executive vice president at TFI International (NASDAQ: TFII). His company, he said, is learning to do 'more with less.' And with nobody expressing optimism about a rising tide arriving on the freight market's shores anytime soon, the talk turned to just that: doing more with Seymour, president and CEO at Kriska Transportation Group and moderator of the Large Carriers session, asked his three panelists about cost-cutting strategies they have undertaken during the continuing downturn. Williams said Knight-Swift is looking at costs 'in order to keep ourselves afloat, recognizing that the rate size is not helping at all.' TFI's Brookshaw, who runs the company's truckload operations, said while costs are being monitored, TFI is looking more at various measures of productivity and efficiency. One push at TFI, according to Brookshaw: 'How do we improve the velocity of our trucks?' Another metric the company has been focusing on is revenue per active driver. And that involves a push on sales that Brookshaw said has never been a high priority at TFI, which has been growing through acquisitions big and small, including struggling T Force Freight, the LTL carrier that had been UPS Freight. TFI has 'never been big on the sales side,' Brookshaw said. 'But we've been trying to get out and be more in front of our customers and see what's going on.' TFI CEO Alain Bedard has never been shy on earnings calls with analysts talking about what he sees as issues at the company. Brookshaw was not either. 'We're really just looking in the mirror and saying, 'What can we do to make it better for us?'' Brookshaw said. 'Because there's nothing out there that's going to bring it. We need to drive that improvement ourselves, our revenue and how we're doing things.'Seymour commended Brookshaw's comments. 'There seems to be this relentless conversation around cost, cost, cost, and I am glad you brought up revenue, because you can't just singularly find your way to profitability by cutting costs,' he said. As an executive with Landstar, which has no company drivers but instead moves freight with thousands of independent owner-operators whom the company calls business capacity owners (BCOs), Joe Beacom got the question about the health of that community after years of the freight recession. Beacom, vice president and chief safety and operations officer at Landstar (NASDAQ: LSTR), said about 90% of its BCOs are single-truck operators. He said their costs over the past approximately three years are up more than 30%. (In last year's cost report from the American Transportation Research Institute, published in June, ATRI said the marginal costs of trucking in 2023 reached a new high of $2.27 per mile.) 'So it's been a difficult time, and we've seen a loss of some BCOs,' Beacom said. 'We think they're sitting on the sidelines. Their costs to operate are probably just not allowing them to make a decent living.' Lacking some cost-cutting tools that are available to asset-based carriers, Beacom said Landstar needs to look at other options, like making technology improvements. Beacom also said Landstar, being almost exclusively in the spot market, is not able to benefit from any upturn in the contract market, keeping it stuck in a spot market that has been weak for three years. Without providing specifics, Beacom said Landstar is 'looking at ways to try to take advantage of the contract market a little bit differently.' But he added that Landstar 'hasn't picked a lock on it.' While the ability to cut costs at Landstar has limitations due to its model, Beacom said that isn't the case with the BCOs who haul freight for it. He said the average Landstar driver is 51, usually has used equipment, and 'they do a lot of maintenance themselves.' 'Those that have been able to actually do well in this environment are those that found ways to lower their cost of operations,' he said. Williams said that while large and small carriers might look vastly different, the reality is, 'If you can't make money with one truck, you can't make it with 20,000 trucks.' He added that it was amusing that there was a discussion on the Small Carriers panel about 'How do you compete on cost per mile with the large carriers. And I'm thinking, how do I compete with the small carriers per mile?' The members of the Small Carriers panel focused much of their discussion on how they had kept costs in check. Amber Edmonson, president and CEO of Missouri-based Trailiner Corp., rattled off a list of steps the carrier, with 70 trucks under authority, has taken: keeping equipment longer, stepping up maintenance to make that work even as it cut hours at its shop, and adding some software capabilities. K&J Trucking took some of the same steps, according to President and owner Shelley Koch. 'We were on a four-year turn moving to a five-year turn [for buying new equipment],' Koch said. 'That made a big difference for us.' The company also reviewed things like its tire programs and software processes. One finding K&J made in that process was, 'We didn't find a ton of savings.' She described that discovery as a good thing, because it suggested K&J was operating at a strong level of efficiency. 'But we were just able to understand what our costs were a little bit better,' Koch said. At Brown Dog Carriers, a small Maine-based carrier, President Graig Morin said idling time became a cost-cutting focus. Morin said Brown Dog leases all its equipment through Ryder System (NYSE: R). Brown Dog has only 25 trucks, Morin said, but seven years ago, it had just two. Given that, idling time 'hadn't really been thought about that much.' But as the company grew, 'we really started really paying attention to it, and that was one bit of savings.' Brown Dog also changed insurance carriers, which resulted in savings, Morin said. And when those cost cuts are in place, 'we hope for the best,' he said, expressing a view that might sum up the general sentiment at the conference. More articles by John Kingston ATA economist: US port fees on Chinese ships will hurt freight markets TransForce, which hires thousands of drivers a year, eyeing smaller fleets Stolen load of cellphones involving RXO may be another key broker liability case The post Carriers big and small at TCA wait for signs of freight market turnaround appeared first on FreightWaves.
