This sound is generated automatically. Let us know if you have any feedback.
Dive Summary:
- Schneider National’s first-quarter operating income fell 75% as year-over-year revenue fell more than $100 million due to weak demand amid a slumping freight market. the company said Thursday.
- President and CEO Mark Rourke analysts said The company’s full-load freight cycle has exceeded 600 days, which it described as “longer than any historical standard.”
- Like other carriers awaiting a cargo turnaround, Schneider is focused on controlling costs and is optimistic that better times are ahead. The trucking division gave him hope with $1.1 million GEE income increase. “The pipeline remains strong,” Rourke said, adding that recently closed contacts should boost Q2 and Q3.
Dive Insight:
Schneider M&A Pays Dividends: Carrier Credits Trucking Revenue Gains to Organic and Profitable Growth. The company has targeted the dedicated sector for growth and strengthened this business with the acquisitions of M&M Transport in August 2023 and Midwest Logistics Systems in January 2022.
Similar to other carriers, Schneider also faced weak rates, as weekly truckload revenue per truckload for the first quarter was $3,853, down 4% year-over-year. Truck revenue from operations rose 76% to $14.9 million compared to a year ago, increasing the ratio to 97.2% from 88.3% in the first quarter of 2023.
But the carrier is confident its dedicated business will improve.
“Our dedicated business continues to grow into a strong account origination business,” EVP and CFO Darrell Campbell said on the call. “Year-over-year consistency and dedicated revenue per truck per week are indicative of the resilience of the dedicated portfolio.”
But the carrier is not planning a rosy second half as it cut its guidance range per share, previously $1.15 to $1.30, to between 85 cents and $1.
Schneider hopes for some market improvement in the second half as inventory levels continue to fall. Rourke sees these as conditions showing some signs of a return to historical seasonal trends, but not a return to normal.
“We’re not suggesting we’re completely past the cycle, but that’s how we think about seasonality,” he said. “I would call it pretty standard, as we would normally see in history.”