That compares with a $91 million operating loss in the same quarter a year ago, largely attributed to $86 million in restructuring charges, the company said. It was the LTL carrier’s third straight profitable quarter following deep losses since 2009 that came amid tough pricing competition and a battle for market share.
In the previous quarter, FedEx Freight reported a $42 million operating profit, compared with a $16 million loss in the same period a year ago. The industrial arm of FedEx reported a 9 percent increase in revenue to $1.33 billion and strong yield as it culled more unprofitable freight from its network.
Revenue per hundredweight or yield increased 8 percentyear-over-year in the quarter, buoyed by a higher tariff and contract pricing and fuel surcharge revenue.
“Our return to profitability is a two-fold issue,” FedEx Freight President and CEO William Logue said. “It’s really about yield improvement and network design.”
In early 2011, FedEx Freight completed the integration of two LTL networks, its original regional network and the long-haul network of FedEx National LTL. The carrier switched its orientation from regional andnational to “priority” and “economy” LTL shipping, while cutting more than 100 terminals.
“It was a significant network design change,” said Logue. “Our customers have responded very well,” with “dual-use” customers of both services on the rise.