In the face of this challenging environment, our three largest segments performed very well, with Adjusted Operating Ratios of 82.7% in Truckload, 85.5% in Less-thanTruckload, and 86.4% in Logistics. The muted volumes appear to have been driven by the holiday goods pull-forward earlier in 2022, an existing inventory overhang dating back to last year where some products arrived too late for last year’s season, and general caution around what retailers could expect from consumer demand. Like other fleets, this one saw Q4 break normal seasonal patterns and deliver surprisingly weak numbers.ĭavid Jackson, CEO of Knight-Swift, commented, "We did not experience the typical seasonal strength associated with the last three months of the year, in fact it was the most benign peak shipping season in recent memory. 4) saw revenue drop by 4% while operating income dropped 40% compared to Q4 of 2021. – Knight-Swift Transportation's revenue, income drops We experienced additional pressure on our transactional and contractual business in the fourth quarter as demand and volume were unusually soft during what is normally considered peak season," said Brad Hicks - Executive Vice President, People and President, Highway Services.Ģ022 YTD: $1.33 billion vs. "Transactional or spot truckload volume was down year-over-year, but contractual volume was up slightly year-over-year. ICS actually operated at a loss of $2.9 million on $496 million in revenue, significantly down from the $24 million it brought in Q4 of 2021. Hunt 360, as third-party dray capacity dropped 31% YoY on the platform. 3) saw revenue climb 4% over last quarter, but operating income paired down 13% during a decline in volume in Integrated Capacity Solutions (ICS) and 22% fewer transactions in the Marketplace for J.B. However, we have identified many areas of opportunity that we believe will improve both of these acquired organizations in the months ahead, even though we will likely be facing a challenging operating environment in 2023," said Gerdin. Given the scale of the two most recent acquisitions relative to the consolidated company, this had a meaningful negative impact on our legacy operating results during the fourth quarter of 2022, the first full quarter of CFI operating results, and we expect that to continue in early 2023. Following these impacts during the full year of 2022, Heartland Express delivered an operating ratio of 68.6% (which includes a gain on sale of a terminal property of $73.2 million), Millis Transfer delivered an operating ratio of 82.4%, Smith Transport delivered an operating ratio of 93.5% (seven months of ownership), and CFI delivered an operating ratio of 98.1% (four months of ownership). These challenges result from the revaluation of equipment which drives elevated depreciation expense with minimal opportunities to recognize gains from the sale of these acquired fleets of revenue equipment, along with elevated fixed costs and certain contractual commitments. “ While we are excited by the recent and significant growth in our organization, we are also mindful that in the periods immediately following acquisitions we face additional operating headwinds. Hearland Express CEO Mike Gerdin talked up having "one of the newest fleets of tractors and trailers" in the industry, but pointed out that wasn't exactly uniform across the organization. 42) set an all-time revenue record in Q4 of 2022 thanks to a spree of acquisitions (Smith Transport, CFI and Millis Transfer), but the consolidation of fleets came at some expense. Heartland Express: How did those acquisitions work out? In addition to the positive changes in our freight mix, our fourth quarter 2022 revenue per hundredweight is up by 13.1% including fuel surcharge revenue and 3.8% excluding fuel surcharge revenue over the same period in the prior year," said Schmitt. Our top four high value verticals went from 18% of our freight mix in 2021 to 29% in 2022, resulting in fourth quarter of 2022 weight per piece up by 12.1% over the same period in the prior year. From 2021 to 2022, industrial and electronics shipments are up over 50%, medical is up almost 25% and live events business up by 120%. “ Changes in our freight mix continue to showcase our precision execution focus on high value freight. 50) grew revenue at 5%, slower than the targeted 7% to 11%, but still part of what President and CEO Tom Schmitt called "a record year by a mile." Schmitt particularly focused on Forward's success in picking up high-value freight. – Forward Air Corporation misses target but posts a record yearįorward Air Corporation (No.
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