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Dive Brief:
- PAM Transportation Services reported a net loss of $2.2 million in the fourth quarter, a dip in the red that left its net income at $18.4 million for the full year, per earnings report.
- The truckload operating ratio, excluding fuel surcharges, was 103.7% for the quarter and 97.7% for the year, reflecting a troubled freight market that is hurting the industry.
- President and CEO Joe Vitiritto also cited United Auto Workers strikes in 2023 as a drain on PAM’s large base of auto manufacturers and suppliers. “Unlike previous UAW strikes, the approach taken in the 2023 strike impacted the majority of our automotive customer base,” he said in an earnings report.
Dive Insight:
PAM saw its financial performance deteriorate as the strikes continue in 2023 thereafter major contracts expired In September. Truck load factor was 99.3% in the first quarter, 92.7% in the second quarter and 95.8% in the third quarter.
“While the strike ended in mid-November, the negative impact continued through the typical holiday shutdown without the post-strike pick-up in the auto industry that we have sometimes experienced after previous UAW strikes,” Vitiritto said.
This came as car sales failed to return to pre-COVID-19 levels and car loan balances increased by $12 billion in the fourth quarter, according to Federal Reserve banking system data.
PAM’s biggest customer in recent years has been General Motors, and about 31% of its revenue in 2022 was in transportation services for the automotive industry, per Annual Report 2023. Fiat Chrysler Automobiles, now part of Stellantis, was also one of its biggest customers during those years.