Covenant Transportation lost $11.1 million in the third quarter compared to a $1.9 million profit in the same period year ago, as the truckload carrier saw freight revenue fall 9 percent and took a $9.4 million impairment charge.
The Chattanooga, Tenn.-based company’s total revenue fell 2.1 percent year-over-year to $161.4 million. Covenant Chairman, CEO and President David Parker said utilization was hurt by the decline in the long-haul business, reduced loading efficiency caused by new software implementation and reducing unprofitable business at regional subsidiary Star Transportation.
“The simple fact is that we have not been getting enough freight revenue per tractor to justify serving all of our lanes,” said Parker. “We have been working with our customers on improving this over the last year, and will continue to evaluate decisions in coordination with our customers as to which freight is worth transporting."
The company incurred a $9.4 million after-tax non-cash impairment charge related to a past acquisition.