Covenant Transport Loses Less in 1Q

Covenant Transport lost $5.5 million in the first quarter, approximately $2.3 million less than the same period a year ago, due to weak freight demand.

Revenue declined 26.4 percent to $181.7 million in the period for the Chattanooga, Tenn.-based truckload operator. In addition to falling demand, excess tractor and trailer capacity in the truckload market and subsequent rate pressure from shippers and brokers led to an 8.2 percent reduction in average freight revenue per tractor per week, the company said.

Covenant has lost money in every quarter since 2006. Covenant expects to operate at a loss for the first half of the year, but expects to make money for the full year 2009, said Covenant Chairman, President, and CEO David R. Parker.

“Although we believe our goal of profitability for 2009 remains achievable, it has become incrementally more difficult to reach,” Parker said. “To attain our goal we will need to rapidly implement additional identified cost savings, hold steady or experience only a small further reduction in rates, and slightly improve utilization of our remaining fleet of trucks for the remainder of the fiscal year.”

Contact John Gallagher at jgallagher@joc.com .