FedEx Freight reported a $162 million operating profit for fiscal 2012 on $5.3 billion in revenue, its first annual profit since 2008, when it earned $329 million.
The largest U.S. less-than-truckload carrier rolled back into the black in its most recent quarter as well, as stronger pricing and higher volume pushed revenue up 7 percent to $1.4 billion.
The industrial freight arm of FedEx reported an $81 million operating profit in the quarter that ended May 31, a 93 percent increase from its year-ago profit.
The carrier more than recovered from a $1 million operating loss in its fiscal third quarter ending Feb. 29, posting a quarterly operating ratio of 94.2 percent.
For the full year ending May 31, FedEx Freight increased revenue 7.1 percent to $5.3 billion — an 18.2 percent increase from its recession low point in fiscal 2010.
FedEx Freight plans to make changes to its LTL network next month that it says will speed freight and help the company improve its operating margin.
“We’ll be speeding up about 6,000 lanes,” President William J. Logue, said during a conference call with stock analysts after FedEx released earnings June 19.
(A transcript of the conference call published by Seeking Alpha is available here.)
Those changes are adjustments to a network overhaul FedEx Freight completed last year, merging its regional and national networks and introducing priority and economy service.
The trucking company gained volume in its March to May quarter despite a slowing economy. Average daily LTL shipments and LTL yield both increased 4 percent.
Yield rose on higher fuel surcharges and base rates, Logue said, adding FedEx Freight is “laser-focused” on improving yield in its new fiscal year.
The carrier plans to hike its base tariff rates 6.9 percent on average July 9.
FedEx Freight has been working to balance volume and yield since deep discounting during the recession led to losses totaling $372 million over three years.
“The network design is really important to really move this volume efficiently through our network to put it to the bottom line,” he said.