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Trucker Celadon Loses $2.1 Million
First loss in seven years as international freight slumps
Truckload carrier Celadon lost money for the first time in more than seven years, dropping $2.1 million in the quarter ending March 31.
The loss resulted from a dramatic drop in volume primarily caused by lower freight volumes between the United States and Mexico and Canada. U.S. government surface transportation statistics indicate a decline of 27 percent for the month of January 2009 versus January 2008. Celadon revenue for the quarter decreased 23 percent to $106.9 million. Freight revenue, excluding fuel surcharges, was down 14.4 percent to $96.2 million.
“The losses were sustained in January and February, with a profit earned in the month of March,” said Steve Russell, chairman and CEO. A decline in the value of the Mexican peso also hurt Celadon’s bottom line, but Russell said he believes it will have a positive impact on Mexico’s exports in the future. At the current exchange rate, Mexico has become much more competitive with China, Russell said.
In total, billed miles in the quarter declined about 11 percent. Movements between the United States and Mexico and Canada declined 26 percent. Domestic U.S. billed miles improved 2.4 percent with the addition of customers that came with the acquisition of Continental Express.
Rates per loaded mile declined about 2 percent year-over-year as truckload capacity exceeded demand.
Cost cutting measures include fuel conservation efforts that merited an Excellence Award from the U.S. Environmental Protection Agency’s SmartWay Partnership. Reductions in staff, freezing of salaries, and a “hiring frost” also contributed to lower expenses.
Contact Thomas L. Gallagher at tgallagher@joc.com .
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