Copyright 2006, Traffic World, Inc.
Despite significant quarterly gains in revenue and profits, service failures are costing Dynamex customers.
The $343 million carrier last week reported quarterly income of $3.2 million, up 18 percent from the year-ago period, on revenue of $87 million, up 6.3 percent.
But the Dallas company''s core growth rate, excluding the impact of fuel surcharges and changes in the foreign exchange rate, came in below the targeted range of 5 percent to 7 percent for its fiscal third quarter.
"Customer attrition that was previously disclosed had a slightly greater impact on sales this quarter than we had anticipated," Dynamex said.
In its fiscal second quarter, Dynamex attributed customer attrition to missing growth targets.
Half of the customer attrition was due to "service failures" in certain locations. Another 10 to 15 percent of attrition represented arrangements Dynamex ended because of inadequate profits.
At the time, the company announced various changes in its organizational structure and service map designed to boost results in its fiscal third quarter.
Despite the disappointing quarterly results in the third, Dynamex executives are still hopeful that the turnaround plan will improve results in the coming quarters.
"Over the next two quarters, we expect top line growth to accelerate as we phase in new business awarded in Canada and the U.S. The entire organization is focused on increasing top-line growth and we believe we will achieve our growth targets in the near term," said Dynamex Chairman and CEO Rick McClelland.
This year the company reorganized its management, naming James H. Wicker III president of Dynamex U.S., with day-to-day responsibility for field operations, sales and marketing and information services in the United States. Dynamex Canada is headed by Jim Aitken.
Dynamex was formed from the merger of Parcelway and Dynamex Express, the former ground courier operations of Air Canada, in 1995. The company has about 2,200 employees and contracts with 3,500 owner-operators.