Truckload carrier Celadon Group more than doubled its profit in the second quarter despite a 1.2 percent drop in freight revenue to $115.3 million.
Celadon increased its profit to $5.5 million compared with $2.7 million a year ago. The carrier raised rates 4 percent and cut equipment and insurance costs.
Total revenue, including fuel surcharges, climbed 6.3 percent to $147.7 million.
Fuel surcharge revenue rose 45 percent and covered 82 percent of the long-haul truckload carrier’s $39.6 million diesel fuel bill in the second quarter. Insurance and claims costs were down by $2.4 million, or 41 percent.
For its fiscal year that ended June 30, Celadon increased revenue 6.3 percent to $556.7 million and more than tripled its profit to $14.7 million. A decline in miles per seated truck of about 6 percent, largely the result of improved freight selection, contributed to the second-quarter drop in freight revenue.
As truckload capacity tightens, carriers such as Celadon increasingly are dedicating their equipment to the most profitable shipments or “cherry picking” freight. That’s contributed to a solid increase in profitability at truckload carriers such as Heartland Express, Werner Enterprises and J.B. Hunt Transport Services.
Celadon’s purchased transportation costs rose 26 percent from a year ago, another sign that freight demand exceeded the truckload carrier’s capacity limits. The company’s tractor fleet dropped by 40 units from a year ago to 2,620 trucks.
Although average revenue per tractor per week declined 2.6 percent as miles declined, average revenue per loaded mile increased 4 percent year-over-year.
Contact William B. Cassidy at firstname.lastname@example.org. Follow him on Twitter at @wbcassidy_joc