William B. Cassidy, Senior Editor | Oct 27, 2011 2:48PM EDT
Knight Transportation increased revenue 18.4 percent year-over-year in the third quarter to $227.1 million, but profit dropped slightly to $16.6 million as the truckload carrier expanded several lines of business.
The truckload carrier’s refrigerated trucking business increased revenue 18.6 percent from a year ago, port drayage revenue was up 22.4 percent and truck brokerage revenue rose 36.2 percent, all excluding revenue from fuel surcharges. In contrast, Knight’s core dry van truckload revenue was flat, excluding surcharges. Total revenue before fuel surcharges increased 13.2 percent year-over-year to $183.4 million in the quarter, compared to $162.1 million a year ago.
Operating costs increased 21.5 percent. Fuel expenses rose 34 percent to $59.7 million while surcharge revenue rose 49.5 percent to $43.7 million.
“We are committed to providing our customers a broad and growing range of truckload services,” said Kevin P. Knight, chairman and CEO of the Phoenix-based company, the 12th largest U.S. truckload carrier, according to SJ Consulting Group.
“The more rapid growth of our port and rail services, brokerage, and intermodal businesses impacts our operating margin and returns because these businesses usually generate lower margins than our asset-based businesses,” he said.
Net profit was up slightly from the second quarter, when Knight earned $16.4 million on $228.5 million in total revenue.
Knight’s operating ratio — operating expenses as a percentage of revenue — was still an enviable 84.9 percent. Knight’s net margin — net profit as a percentage of total revenue — was 7.3 percent, and 9 percent excluding surcharge revenue.
The carrier increased its miles per tractor 2.3 percent and revenue per total mile, before fuel surcharges, 2.2 percent, while non-paid empty miles dropped 2.7 percent. That helped push up averagerevenue per tractor 4.6 percent.
Knight finished the quarter with 3,939 tractors, only slightly more than a year ago. The carrier increased its owner-operator pool by 6.6 percent, adding 28 independent contractors to its total fleet since the third quarter of 2010.
At a time when truckload carriers claim it is increasingly difficult to hire and keep truck drivers, Knight said his company is “well positioned” to “source, develop and retail high quality drivers,” using its own training and development programs.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
