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Dive Summary:
- Schneider National’s dedicated business saw a year-over-year revenue trend down, recording a A 1% increase or a $5.3 million boost in Q4. This reversed a series of year-on-year declines in previous quarters for the sector.
- In addition to the acquisitions contributing to the turnaround, EVP and CFO Darrell Campbell reported that dedicated trucking revenue saw “solid organic growth.”
- Acquisitions could further strengthen the division, Campbell told analysts. “We remain disciplined in tailored acquisitions, which will continue to support our growth and earnings expectations,” he said.
Dive Insight:
The Wisconsin-based carrier has focused on growing its dedicated truck business since it was acquired Midwest Logistics Systems in December 2021, deBoer Transportation in June 2022 and M&M Transport Services last August.
The addition of M&M was expected to increase Schneider’s exclusive contract revenue to $1.5 billion. However, its business as a whole is still looking to regain its footing given a challenging environment across the board.
While Schneider’s truck segment reported revenue of $550.7 million for the fourth quarter, operating income for the business was reported at $18.8 million, up from $68.9 million a year ago. This is due to a number of factors, including lower network pricing, increased insurance claims costs and a net loss on the sale of equipment.
President and CEO Mark Rourke said the company recognizes the impact of the weak freight environment on current growth in its dedicated business. However, he added, “dedicated’s solid revenue and profit profile places it at the top of Schneider’s strategic growth priorities alongside intermodal.”
For years, the carrier has methodically increased the volume of exclusive activities it has as part of a long-term strategy.
Campbell said the company’s dedicated truck count accounted for more than 60 percent of the company’s entire truck segment, up from 57 percent a year ago. “This trend reflects progress on our stated commitment to strategically grow this business organically and through opportunistic acquisitions,” he said.
Experts say more mergers and acquisitions are likely in 2024 as carriers look for increased capabilities.