Universal Truckload Profit Falls 13.9 Percent

Universal Truckload Service’s profit slipped 13.9 percent in the second quarter, despite gains in its core truckload revenue, brokerage and intermodal businesses.

The Warren, Mich.-based company’s net profit dropped $600,000 year-over-year to $3.9 million, while revenue rose 16.6 percent to $180 million in the quarter. Higher costs squeezed Universal’s profit margin even as rate hikes and a 5 percent increase in truckload volume pumped up the motor carrier’s revenue.

Overall, the company’s operating expenses rose 15.7 percent from a year ago.

Purchased transportation costs associated with brokerage rose 19.5 percent. Rising costs restrained a rapid rise in profit at some truckload carriers in the quarter, including Covenant Transportation and Knight Transportation. Other carriers, Heartland Express and Celadon, for example, increased profit.

At Universal, higher rates and increased volume helped blunt rising costs.

“Our rates have improved over the first quarter of 2011 and over the second quarter of 2010," said Don Cochran, Universal’s president and CEO. “Improved rates have helped us grow our fleet of owner-operators, as well as procuring additional capacity in our brokerage businesses.”

In the second quarter, average operating revenue per loaded truckload mile increased 6.6 percent, excluding fuel surcharges, to $2.41 per mile. In the brokerage business, average operating revenue per loaded mile increased 26.6 percent, while average operating revenue per load jumped 12.4 percent.

The carrier’s core truckload revenue rose 14.2 percent from a year ago, while brokerage sales rose 21.3 percent and intermodal revenue rose 20 percent. Fuel surcharges surged to $25 million, about 14 percent of revenue.

“Through the end of 2011, we expect to continue to gain capacity and improve the services we deliver,” said Cochran, while “continuing to focus on controlling cost.”

Universal increased its operating revenue 20.4 percent to $605.9 million, aided by trucking acquisitions and the economic recovery.