Quality Distribution increased its profit more than 300 percent in the second quarter to $9 million as the nation’s largest bulk trucker offset slipping demand by cutting operating expenses and fleet costs.
The rocketing profit overflew declining freight volume in Quality’s core chemicals business, and relatively flat revenue growth excluding fuel surcharges.
Quality’s total revenue shot up 7 percent year-over-year to $190 million, but rose only 0.7 percent net of fuel surcharges. Logistics business revenue was flat.
Quality’s Boasso intermodal revenue rose 7.1 percent from a year ago, while revenue from the shale fracking market helped offset the drop in chemical shipments.
Driver turnover contributed to lighter volume in Quality’s chemical business, said CEO Gary Enzor. But cost containment initiatives boosted operating income.
“More importantly, we recently won a multi-year contract with a major energy company to provide full logistics” in the Marcellus Shale region, Enzor said.
Quality will provide 100 trucks to haul fresh and disposal water used and generated in hydraulic fracturing or fracking to extract natural gas from shale deposits.
Revenue from that contract will begin “ramping up” in the second half of the year, Enzor said.
Contact William B. Cassidy at email@example.com. Follow him on Twitter at @wbcassidy_joc