William B. Cassidy | Jun 23, 2011 10:41AM EDT
FedEx Freight returned to profitability in its last quarter after completing the merger of its long-haul and regional less-than-truckload operations.
The nation’s largest LTL carrier reported a $42 million operating profit for the quarter that ended May 31, compared with a $36 million loss a year ago.
In the previous quarter, FedEx Freight lost $110 million. FedEx’s industrial trucking unit has lost more than $500 million over the last 10 quarters.
For the full year, FedEx Freight’s revenue rose 14 percent to $4.9 billion. However, the carrier’s fiscal 2011 operating loss also rose 14 percent to $175 million.
The next largest LTL operator is YRC Worldwide, which reported $4.3 billion in revenue last year. Con-way Freight had $3.1 billion in revenue in 2010.
FedEx Freight struggled during the recession after purchasing a long-haul LTL carrier, Watkins Motor Lines, and engaging in a fierce LTL price war.
The carrier’s recovery follows the merger of FedEx’s two LTL networks, FedEx Freight and FedEx National LTL, formerly Watkins, completed in January.
The recovery also reflects a yield improvement effort at FedEx Freight, which culled low-priced or unprofitable freight gained at deep discounts from its network.
The LTL operator increased yield 13 percent year-over-year, including fuel surcharges, in the last quarter, and 11 percent the previous quarter.
Net of fuel surcharges, FedEx Freight’s yield increased 9 percent from a year ago. The company’s LTL yield has improved for four consecutive quarters.
--Contact William B. Cassidy at wcassidy@joc.com.
