Rising fuel prices and tight driver availability slowed profit growth at Heartland Express, still one of the most profitable truckload carriers in the U.S.
The company’s net profit dropped 15.8 percent year-over-year in the quarter to $15.4 million, while operating revenue rose 4.2 percent to $132.5 million. At 81 percent, the Liberty, Iowa-based carrier’s operating ratio was still one of the best in trucking, though it climbed from 76.2 percent in the second quarter.
In comparison, most truckload carriers post operating ratios —operating expenses as a percentage of operating revenue — in the low 90s or at best high 80s. Heartland is the 17th largest truckload carrier in the U.S., ranked by revenue, according to data from SJ Consulting Group, with $500 million in revenue last year.
Trucking is challenged by a “shrinking pool of qualified drivers,” the company said in a statement. At the same time, carriers are tightening hiring qualifications.
The trucking company’s fuel costs rose 29.3 percent year-over-year in the quarter, while average fuel prices rose 31.3 percent during the same period. Heartland said it is focusing on fuel surcharge pricing, truck idling hours, and fuel purchasing decisions in an effort to lessen the impact of higher fuel costs.
The company, founded in 1978 by the late Russell Gerdin, also spent $41.9 million on new tractors and equipment in the first nine months of the year. Heartland took delivery of 196 Navistar International tractors in the third quarter and plans to purchase 329 additional trucks during the fourth quarter.
Those trucks will replace older equipment. Heartland sold 866 tractors in the third quarter. The average age of its tractor fleet is now 1.8 years.