Knight Transportation rode strong truckload demand to higher profit in the third quarter, while building its truck count up to a record high of 3,912 tractors.
The Phoenix-based carrier's net income soared 27 percent from a year ago to $16.7 million in the quarter, a 5.7 percent increase from the second quarter of 2010.
Knight's total revenue rose 10.5 percent from a year ago to $191.3 million, a 3.2 percent increase from the second quarter and 15.4 percent from the first quarter.
By The Numbers: U.S. Truck Shipping Costs.
Excluding fuel surcharges, freight revenue reached $162.1 million, a 7.9 percent increase from a year ago and 4.5 percent from the second quarter.
Its operating ratio dropped to 83.2, compared with 86.2 a year ago.
Like many of its truckload and LTL competitors, Knight saw the surge in freight that filled trailers in the second quarter begin to ebb in the last quarter.
Demand was consistent throughout the quarter, said Chairman and CEO Kevin P. Knight, but it didn't outpace capacity to the same degree as in the previous quarter.
The carrier was able to boost revenue per loaded mile 4 percent from a year ago, while non-paid empty miles decreased 6.8 percent.
Its average length of haul increased 6.7 percent from a year ago to 496 miles, up from 484 miles in the second quarter as well, bolstering that revenue.
Knight increased the size of its truck fleet 4.3 percent from a year ago and 4.7 percent from the beginning of 2010, when it operated 3,736 trucks.
That's an unusual expansion in an industry largely focused on limiting capacity, but a strong record of profit despite the recession puts Knight in position to grow.
Also, much of that added capacity comes in the form of new owner-operators, who added tractors at no additional asset cost to Knight Transportation.
Owner-operators now account for 10.8 percent of Knight's capacity, a 34.4 percent increase from a year ago and a 130.3 percent leap from the fourth quarter of 2008.
-- Contact William B. Cassidy at email@example.com.