''Brisk'' Demand for Truckload Service

''Brisk'' Demand for Truckload Service

Copyright 2004, Traffic World, Inc.

Trucking will have a solidly profitable 2004 if first-quarter earnings results from major truckload carriers are a harbinger.

J.B. Hunt Transport Services, Lowell, Ark., said its quarterly profit tripled, helped by efficiency gains and what it called "uncharacteristically brisk demand" for loads in the normally slow months of January and February.

Hunt''s first-quarter earnings were $33 million on an 8.2 percent rise in revenue to $618 million, compared with $11 million in earnings on $571 million in revenue for last year''s first quarter. That exceeded analysts'' revenue forecasts, which averaged about $600 million.

Landstar System, Jacksonville, Fla., said its first-quarter net income was $8.1 million on a 15 percent rise in revenue to a record $421 million, compared with $10.2 million in earnings on $366 million in revenue in the year-ago period. The current quarter included a $7.6 million charge to settle a severe accident that occurred at the start of Landstar''s current fiscal year.

Landstar''s operating margin was 3.3 percent in the quarter, which was reduced by 1.8 percent because of the accident, compared with 4.7 percent in the year-ago quarter.

"We are off to a great start," Landstar Chairman and CEO Jeff Crowe said. Crowe is forecasting 8 to 12 percent revenue growth this year.

Werner Enterprises, Omaha, Neb., the nation''s fifth-largest truckload carrier, reported its 10th straight year-over-year quarter of higher revenue and earnings. Werner''s net jumped 31 percent to $15.6 million on an 11 percent rise in revenue to $386.3 million, compared with $11.8 million earnings on $347.2 million revenue in the year-ago quarter.

Scott Flower, trucking analyst for Smith Barney, warned of "headwinds near-term" as Werner strives for 10 percent profit margins. Flower says fuel costs and insurance claims could buffet Werner''s profit goals. Still, Flower called second-quarter freight demand "solid" with tight capacity enabling truckload carriers to be more selective in their load sections.

U.S. Xpress, Chattanooga, Tenn., the nation''s sixth-largest TL concern, said its net income zoomed to $800,000 on a 6.3 percent rise in revenue to $234.7 million, compared with $121,000 earnings on $220.7 million revenue in the year-ago quarter. USX enjoyed a record 6 percent increase in revenue per mile to $1.35 and said its rate per mile in March was "well above" the quarterly average.