JOC Staff | Mar 20, 2013 10:35AM EDT
Con-way Freight’s yield or revenue per hundredweight in the first quarter of 2013 is expected to increase about 3.5 percent year-over-year, according to an analysis by Con-way, the less-than-truckload unit’s parent company.
However, several items during the first quarter are expected to impact near-term profitability by about $14 million before taxes, including a reserve for a large vehicular claim, a charge related to a transition to new technology, costs associated with adverse weather and field training expenses related to line-haul optimization.
Con-way’s self-insured retention program has a “significant” deductible per accident, so this claim, depending on the severity, could have accounted for up to 45 percent of the $14 million hit to operating income, according to Stifel Transportation & Logistics Research Group. Stifel also noted that the “bad accident” is “not unusual for the winter months.”
Meanwhile, Con-way Freight’s tonnage per day declined 1.5 percent year-over-year.
“Tonnage trends, while below last year, have been relatively stable throughout the first quarter and our core operation performance is trending in the right direction,” said Douglas W. Stotlar, Con-way’s president and CEO, in a written statement. “Despite the near-term cost headwinds at Con-way Freight, confidence in our key initiatives and the ability to expand margins — particularly in the second half of 2013 — is being reinforced each day.”
The company’s key initiatives include lane-based pricing and line-haul optimization.
Financial results for the first quarter of 2013 will be released May 1 after business hours.
