Forward Air Adding Volume, Profit

Forward Air Adding Volume, Profit

Copyright 2004, Traffic World, Inc.

If Forward Air is any indication, there is plenty more air freight shipping in the improving economy but not all the shipments are actually getting into the air.

The trucker showed its strongest growth in more than three years in the first three months of 2004 as expansion of tonnage, revenue and yield accelerated for the airport-to-airport operator. With its focus on cost-conscious air forwarders as customers, Tennessee-based Forward Air is a key barometer of the domestic industrial air freight market and its numbers suggested freight traffic is speeding up.

The bottom line for Forward Air was a $6.8 million net profit that was 25.9 percent better than the first three months of 2003. Better than that, however, was that the profit was built on a steep upturn in business that could pump more cash into the trucker''s coffers throughout the year.

Overall revenue was up 13.6 percent to $64.3 million and the core air freight linehaul business grew 11.8 percent, to $54.4 million, the first time Forward Air has expanded its revenue by double digits since late 2000. That air freight trucking revenue in the normally slow quarter was just shy of the revenue in the three months previous and actually better than the company reported in last year''s third quarter.

Weekly tonnage was up 8.3 percent over the first quarter of 2003 even though the fleet grew only slightly, helping push the yield up 3.2 percent.

Like many mainstream LTL truckers, Forward Air is trying to improve margins on its accounts and last year started pushing what it deemed unprofitable business away, a trend analysts believe will pick up steam this year as fuel costs rise and the strong American economy pushes out more freight.

The strong improvement gave Forward Air more than $93 million of cash at the end of the quarter, raising the possibility that the company could try to step up its growth if business and cash flow continue on the upswing. The trucker, which claims a large share of the air freight trucking market in the United States, bolstered its expansion in the 1990s with a limited acquisition strategy that added lanes and customers while taking out competition.