Road to recovery

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2002 Operating Profits
(in thousands of dollars)
2002 2001 Change
Truckload
Covenant Transport 24,974 -63
Heartland Express 62,049 52,619 17.9%
Knight Transportation 47,494 39,551 20.1%
Marten Transport 11,861 15,107 -21.5%
Werner Enterprises 99,454 79,329 25.4%
LTL
ABF Freight 68,221 75,934 -10.2%
Con-Way Transportation 147,154 157,467 -6.5%
Overnite Transportation 71,200 64,000 11.3%
Roadway Express 67,665 61,465 10.1%
Yellow Transportation 70,594 55,884 26.3%
Source: Carrier announcements

If the first batch of announced yearend earnings are any indication, 2002 was a much better year for the trucking industry than 2001, especially in the truckload segment. In the less-than-truckload segment, Roadway Express, Yellow Transportation and Overnite Transportation posted gains in operating profit, while ABF Freight and Con-Way Transportation reported lower earnings than in 2001. With the failure of Consolidated Freightways in September, LTL results could be stronger in 2003.

Only a few publicly held truckload carriers have reported results, but all except Marten Transport posted strong gains over 2001. Based on results for the first nine months of 2002, most carriers will report significant profit gains over 2001.

Most notable is the turnaround at Covenant Transport, which posted an operating profit of almost $25 million, up from a $63,000 loss in 2001. “During the [fourth] quarter, we continued our steady progress on our core goals of enhancing revenue per mile, improving equipment utilization, controlling expenses and limiting fleet growth until justified by acceptable returns,” said Covenant Chairman David Parker.

“We held our fleet size essentially constant versus the same quarter in 2001 while raising average revenue per tractor per week by approximately 2.8 percent,” Parker said. Overall, Covenant’s freight revenue declined about 1 percent in 2002, but its expenses dropped 6 percent.