William B. Cassidy, Senior Editor | Apr 19, 2012 2:29PM EDT
Steady improvement in demand for trucking and non-asset logistics services boosted Werner Enterprises first quarter net profit 30 percent to $21.5 million.
The $2 billion truckload giant increased revenue 6 percent year-over-year to $498.4 million. Excluding fuel surcharges, truck revenue rose 2 percent to $321.2 million.
Werner, the third-largest truckload carrier in the U.S., is one of a growing number of truckers increasing their profits by double digits on single-digit revenue growth.
Earnings reports from the fourth quarter of 2011 and first quarter of 2012 show efforts to achieve what some call a “trucking renaissance,” company by company, are working.
Carriers such as Werner, J.B. Hunt Transport Services and Marten Transport are focused on improving operating margins to achieve sustainable profitability.
The company’s average monthly miles per tractor actually dropped 0.5 percent from a year ago, while its percentage of empty miles increased to 11.8 percent.
The average number of tractors in service was down by 40 units compared with the first quarter a year ago, as Werner kept fleet capacity to 7,300 units.
Truckload rates, like freight demand, moved steadily upward for Werner, as truckload capacity remained tight, constrained by the availability of drivers.
“Contractual rate increase awards year to date in 2012 are similar to percentage increases in the same period of 2011,” the carrier said in a statement.
Werner’s average revenue per loaded mile, or truckload yield, rose 3.2 percent year over year, a slower increase than in the fourth quarter, when yield rose 5.4 percent.
Year-over-year comparisons were affected by severe winter storms in early 2011 that disrupted shipping and delayed demand into March,driving up rates.
Steadier demand and mild weather this year meant business was spread more evenly over the quarter, with freight volume rising in March and early April.
“We continue to believe that favorable truckload demand trends are caused to a greater degree by supply side constraints limiting truckload capacity, as compared to growing demand generated by increased economic activity,” the company said.
Revenue from non-asset value-added services, includingbrokerage, freight management and intermodal, leaped 21 percent from a year ago to $76.8 million.
Intermodal revenue increased 46 percent year-over-year, and intermodal gross margin and operating income rose even higher, the company said.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
