P.A.M. Transportation Services Inc. on Wednesday, Oct. 27, reported a net loss of $490,727 for the quarter ended Sept. 30, 2010, and net income of $455,403 for the nine-month period. These results compare to a net loss of $1.23 million and a net loss of $6.93 million, respectively, for the three and nine months ended Sept. 30, 2009.
Operating revenues, including revenue from fuel surcharges, were $86.7 million for the third quarter of 2010, a 13.0 percent increase compared to $76.7 million for the third quarter of 2009. Operating revenues, including fuel surcharges, were $253.8 million for the nine months ended Sept. 30, 2010, a 20.3 percent increase compared to $211 million for the nine months ended Sept. 30, 2009.
“Third-quarter results did not meet our expectations,” said Daniel Cushman, president of the Tontitown, Ark.-based company. “After making money in the second quarter following several quarters of losses, we had hoped we had turned the corner to consistent profitability. A softer freight market in the third quarter along with some increased costs slowed our momentum.”
Cushman said the third quarter also saw a sharp increase in demand for qualified drivers. “This shift necessitated the removal of the 5 percent pay reduction in August 2010 that had been in effect since June 2009,” he said. “Increased competition for drivers resulted in elevated turnover, and a 42 truck reduction in the number of revenue-producing units for the third quarter compared to the second quarter, resulting in about $2.0 million in lost revenue.” Cushman anticipates the shortage of qualified drivers to become more severe as carriers react to better market conditions by increasing fleet size, and due to the implementation of Comprehensive Safety Analysis 2010.
Cushman said Hurricane Alex’s July impact in northeastern Mexico caused significant damage to highway and bridge infrastructure for many of the primary travel corridors in the region. “This damage closed or diverted many of our freight lanes into and out of Mexico for several weeks, and resulted in about $1.2 million in lost revenue,” he said. “While our results for the quarter did not meet our expectations, we view our discipline in adherence to our model of ‘hauling the right freight to the right place for the right rate’ as the initial investment to provide the foundation for sustainable future growth.”