William B. Cassidy, Senior Editor | Jul 30, 2012 5:01PM EDT
Heavier freight, higher rates and a redesigned network helped regional carrier Saia send profit skyrocketing in the second quarter, despite hauling fewer shipments.
The $1 billion company increased net profit 253 percent to $11.9 million, while operating profit jumped 157 percent to $21.2 million, the carrier said Friday.
Revenue for the quarter increased 8.1 percent year-over-year to $288 million, as LTL tonnage rose 1.1 percent on a 3.3 percent increase in shipment weight.
The number of LTL shipments Saia hauled dropped 2.1 percent from a year ago, but the company’s LTL revenue per hundredweight or yield was up 7.1 percent.
Revenue per LTL shipment increased 10.6 percent, despite the drop in volume. Saia’s operating ratio dropped to 92.6 percent from 96.9 percent a year ago.
“We continue to advance our value proposition with investments in quality and refinements in pricing," Rick O'Dell, president and CEO, said in a statement.
Like many LTL competitors, Saia has re-engineered its network, gaining operational efficiencies through what O’Dell called “industrial engineering initiatives.”
For Saia, however, rethinking its network operations has paid off in a big way, with gains in “essentially every quality metric we measure,” O’Dell said.
The company reduced its purchased transportation costs 14.6 percent from a year ago, enhanced its fuel efficiency and reduced self-insurance costs, he said.
Saia is also taking a disciplined approach to pricing on a lane by lane and shipment by shipment basis, said David G. Ross, transportation analyst at Stifel Nicolaus.
“Saia is doing a lot of little things better than they used to, and those add up over time, to a more profitable and sustainable business,” he said in a note to investors.
Among the steps Ross noted, Saia changed incentives for its national sales representatives to reward profitability instead of volume growth.
The Johns Creek, Ga.-based company recently purchased Robart Companies, a Duluth, Ga.-based truck freight broker.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
