Major public carriers' Q3 earnings reveal an arms race for equipment, drivers

Updated Nov 9, 2021

With the third quarter of 2021 ending on October 1, the freight industry got a fresh look at the balance sheets of the largest public companies in the industry. This quarter companies continued to respond to the ongoing supply chain crunch by focusing on efficient freight wherein the businesses could cash in on historically great rates that no longer seem to be changing with the season

In the entries below, see how the biggest public companies in trucking fared over the last quarter. 

Covenant hit with labor costs, high rents

Covenant Transportation (CCJ Top 250, No. 38) expects to bring in more than $1 billion in revenue this year, a company record, but admits it has work to do in improving its dedicated segment. Overall, the company saw robust growth over a 2020 when it lost a considerable amount of money during the pandemic reshuffle. The company's slight decline in profitability compared to the previous quarter owes to increased labor costs and rent on a newly leased facility. 

“From a segment standpoint, our Expedited and Managed Freight service offerings have continued to exceed our expectations through improvements in equipment utilization, rates and an exceptionally strong spot rate market. Our Dedicated segment fell short of our expectations by failing to improve sequentially from the second quarter. Although we have been successful in securing improved rates within this segment, the continuation of supply chain disruptions with certain of our key customers along with inflation in cost per mile prevented us from achieving the desired improvements to profitability. We are continuing to address these issues with our customers through contract revisions and have given exit notice to certain customers where our efforts have been unsuccessful," Chairman and Chief Executive Officer, David R. Parker, said

Revenue: 2021 YTD: $751.7 million vs. 2020 YTD $613.3 million

                 2021 Q3: $274.5 million vs. 2020 Q3: $210.8 million

Income: 2021 YTD: $48.9 million vs. 2020 YTD: ($23.5 million)

                2021 Q3: $20 million vs. 2020 Q3: $6.8 million

Forward Air Corporation picks winners for a strong quarter

Forward Air Corporation (CCJ Top 250, No. 50) enjoyed strong growth and some record-setting statistics thanks to high rates and "surgical collaboration with customers on selecting, handling, and pricing freight" in expedited freight and intermodal hauling. Tom Schmidt, the company's CEO, credits the quarter to being picky. With load-to-truck ratios soaring, Forward Air seems to have picked winners all the way down, as it grew its LTL business by "eliminating inefficient freight, inefficient meaning loose, oversize non-palletized from our system" to ensure the system is "unclogged." In the quote below announcing the earnings, Schmidt again stresses focusing on efficient freight. 

“During the months of July and August, we completed a process of cleansing our inefficient freight and replacing with higher quality freight," the earnings release read. "Our surgical collaboration with customers on selecting, handling, and pricing freight led to the highest ever monthly net income for the month of September with our less-than-truckload line of business reporting record levels in weight per shipment and revenue per shipment. Business momentum combined with the completion of our cleanse process culminated in record quarterly reported income from operations of $42.5 million and adjusted income from operations of $43.4 million. Our record reported net income per diluted share of $1.12 and adjusted net income per diluted share of $1.14 exceeded the high end of our $1.03 to $1.07 guidance range. Our third quarter revenue growth of 26% was slightly below the low end of our guidance range of 28% to 32%.”

Revenue: 2021 YTD: $1.2 billion vs. 2020 YTD $919.2 million

                 2021 Q3: $419.6 million vs. 2020 Q3: $331.9 million

Income: 2021 YTD: $107.3 million vs. 2020 YTD: $53.1 million

                2021 Q3: $42.4 million vs. 2020 Q3: $23.5 million

Heartland Express goes debt free, but staffing troubles persist 

Heartland Express (CCJ Top 250, No. 42) reported a strong quarter and $180 million in cash on hand, but cited staffing troubles across trucking and other industries as hampering business. Overall, the company improved its operating ratio to around 78% and paid out almost $40 million in a special dividend to shareholders. Despite incredibly tight supply in new tractors, Heartland dropped the average age of its tractor fleet to 1.7 years from 2 years in Q3 of 2020.

“Freight demand has continued to be strong and has reached unprecedented levels throughout the third quarter of 2021 and we expect these trends to continue for the remainder of 2021 and well into 2022," Mike Gerdin, the company's CEO said in announcing Q3 earnings. "We also believe that hiring and retention of employees has reached levels of unprecedented challenge across our industry for both carriers and shippers. We continue to partner with our customers who have had to navigate their own employment related disruptions in order to deliver our strong operating results during the quarter. We believe that this shared challenge of hiring and retaining both drivers and other supply chain critical employees will continue in the year ahead. To address that challenge, we have increased wages and enhanced the compensation features for our drivers multiple times in the last twelve months. We will continue to invest in our drivers, our fleet of revenue equipment, our terminal locations, and technology to ensure our drivers receive a rewarding level of compensation along with the tools to have a safe and successful career at Heartland Express.”

Revenue: 2021 YTD: $459.1 million vs. 2020 YTD: $489.5 million

                  2021 Q3: $152.6 million vs. 2020 Q3: $162.2 million

Income: 2021 YTD: $78.9 million vs. 2020 YTD: $69.7 million

                2021 Q3: $33.3 million vs. 2020 Q3 $27.3 million

J.B. Hunt keeps the wheels turning at rail yards

J.B. Hunt (CCJ Top 250, No. 3) saw double digit revenue growth year over year in every segment, with Truckload growing 87%. The company's Intermodal segment saw volumes drop by 6% vs. 2020, but revenue per load increased by 18% as rates rise at crowded ports and rail yards. With 102,230 units of trailing capacity and 6,017 power units in the dray fleet, J.B. Hunt represents one of the single biggest players in the intermodal segment, which took in $1.4 billion in revenue, compared to $664 million in dedicated freight, $666 million in logistics, $205 million in final mile services, and $203 million in truckload revenues.

Revenue: 2021 YTD: $7.8 billion vs. 2020 YTD: $6.3 billion

                  2021 Q3: $2.8 billion vs. 2020 Q3: $2.2 billion

Income: 2021 YTD: $449.1 million vs. 2020 YTD: $329.9 million

                2021 Q3: $723 million vs. 2020 Q3: $505.4 million

Knight-Swift Transportation's Power-only service powers through

Knight-Swift (CCJ Top 250, No. 4) continued to beat expectations for the fourth straight quarter while growing revenue and improving margins in each segment of its business. The truckload sector saw a 24.9% increase in revenue per loaded mile, but 13.6% fewer miles per tractor. In the logistics sector, revenue jumped 130% as the company's power-only service offering and fleet of more than 60,000 saw a 339% spike in revenue. 

The shipping giant in July bought Dothan-Alabama-based ACT to expand its LTL segment. "We are pleased with the results of ACT and we are encouraged with the synergy opportunities the teams have identified and expect to improve the cost structure as well as capitalize on network and revenue opportunities. We feel confident we are on pace to achieve our goal of an 85% Adjusted Operating Ratio in the coming years," the company said in its earnings release

Revenue: 2021 YTD: $3.8 billion vs 2020 YTD: $3.1 billion

                  2021 Q3: $1.6 billion vs. 2020 Q3: $1.2 billion

Income: 2021 YTD: $623.4 million vs. 2020 YTD: $204.2 million

                2021 Q3: $270 million vs. 2020 Q3: $369.7 million

Landstar sets revenue record with almost 60% growth across the board

Landstar System, Inc. (CCJ Top 250, No. 9) grew revenue, operating income and net income at 60%, 60%, and 59% respectively in a bang up quarter. The truckload segment dominated the revenue mix with $918 million in revenue from vans and $422 million from flatbed. The company also saw an increase in demand for power-only, expedited, straight truck, cargo van and other types of vehicles lumped under the "other truck transportation" line item in the earnings release. "Other truck transportation revenue was 13.2 percent and 10.8 percent of total truck transportation revenue in the 2021 and 2020 third quarters, respectively," the release said

“Following a record-breaking 2021 second quarter, the 2021 third quarter reset the standard as the best quarterly financial performance in Landstar history. 2021 third quarter revenue, gross profit, variable contribution, net income and diluted earnings per share each set all-time quarterly records,” said Landstar President and CEO Jim Gattoni. “Our load volume hauled by truck in the third quarter grew 22 percent compared to the 2020 third quarter, which at the time was the second highest third quarter load volume hauled by truck in Landstar history. Additionally, third quarter truck loadings increased from the 2021 second quarter by 3.5 percent, the second largest ever increase in truck loadings from the second to the third quarter in Landstar history behind only 2020 when the second quarter included the most significant volume declines caused by the COVID-19 pandemic. Our 2021 third quarter performance was particularly impressive considering we were following an already record-setting second quarter, and, in most years, load volume hauled by truck experiences a slight decrease sequentially from the second quarter to the third quarter. We attribute this unseasonal increase in volume to ongoing, broad-based demand for freight transportation services, with particular strength in sectors benefiting from consumer spending that has continued to be a big driver of freight activity.”

Revenue: 2021 YTD: $ 4.5 billion vs. 2020 YTD: $2.8 billion

                  2021 Q3: $1.7 billion vs. 2020 Q3: $1 billion


Income: 2021 YTD: $356.4 million vs. 2020 YTD: $168.5 million


                2021 Q3: $131.4 million vs. 2020 Q3: $82.3 million

Marten Transport focuses on improving drivers' lives

Marten Transport (CCJ Top 250, No. 13) saw its net income jump nearly 20% both year over year and compared to last quarter while operating revenue hit a record $251.3 million in the quarter. The company said it would focus on investing in drivers to boost its reefer and dry van business across the truckload, dedicated, intermodal, brokerage and Mexican segments. 

"We have been heightening and will continue to heighten our emphasis on structurally improving our drivers’ jobs and work-life balance by collaborating with our customers, while also increasing our driver compensation. Our approach, which I mentioned in our second quarter earnings release, is working despite the unrelenting national shortage of qualified drivers. With our peoples’ smart, hard work, we began the fourth quarter with 181 more of the industry’s top drivers than we employed at the beginning of the third quarter. Additionally, we increased our number of refrigerated containers by 53 during the third quarter, expanding our fleet to 607 containers at September 30th," Executive Chairman Randolph L. Marten said.

Revenue: 2021 YTD: $706.7 million vs. 2020 YTD: $647million


                  2021 Q3: $251.2 million vs. 2020 Q3: $216 million


Income: 
2021 YTD: $625.7 million vs. 2020 YTD: $579.3 million


                2021 Q2: $28.4 million vs. 2020 Q2: $24.4 million


Old Dominion staffs up to maintain growth

Old Dominion (CCJ Top 250, No. 10) saw its third straight quarter of double digit revenue growth as it continued to invest in increasing its capacity to grow its market share. The company added more than 1,000 new full-time employees during the third quarter as it seeks to staff up, though Greg Gantt, the company's CEO and president, said it continues to need more people. Interestingly, the company grew LTL revenue per hundredweight by 15.7% and increased LTL tons by 13.7% while dropping LTL weight per shipment by 4.8% to "reduce the number of heavy-weighted shipments in our network to preserve capacity and improve our operating efficiency."

"These efforts, as well as the 0.8% increase in average length of haul, also had the effect of increasing our reported yield metrics. The 10.1% increase in LTL revenue per hundredweight, excluding fuel surcharges, reflects the changes in the mix of our freight as well as the success of our long-term pricing strategy that focuses on individual account profitability," said Gantt. 

Revenue: 2021 YTD: $3.8 billion vs. 2020 YTD: $2.9 billion

                 2021 Q3: $1.4 billion vs. 2020 Q3: $1 billion


Income: 2021 YTD: $1 billion vs. 2020 YTD: $652.5 million


                2021 Q3: $383.4 million vs. 2020 Q3: $270.2 million

P.A.M. Transport finds its footing

PAM Transport (CCJ Top 250, No. 58) saw a strong quarter but cited continued problems with the supply chain as complicating operations. This includes problems having orders filled from OEMs and disruptions with customers' freight traffic. PAM said it had grown better at adapting to the changing environment, and that these improvments showed in income growth. Despite driving fewer total truckload miles, the company shrank its operating ratio more than 11% year over year in Q3 and increased its total loads.

"We anticipate that our 2021 equipment order will only be fulfilled at the rate of 80% of our 2021 order quantity by the end of the year, with remaining deliveries occurring in early 2022," the company's earnings release said. "The average ages of our truck and trailer fleets were 1.8 years and 5.2 years, respectively, at the end of the third quarter of 2021 as compared to 1.6 years and 4.9 years, respectively, at the end of the third quarter 2020."

Revenue: 2021 YTD: $446.6 million vs. 2020 YTD: $307.4 million


                  2021 Q3: $166.3 million vs. 2020 Q3: $109.8 million


Income: 
2021 YTD: $65.4 million vs. 2020 YTD: $17.5 million


                2021 Q3: $30.8 million vs. 2020 Q3: $10 million


Schneider National sets all-time profit record on strong rates, operating margin

Schneider National (CCJ Top 250, No. 8) looks to have effectively cashed in on high freight rates by posting its best-ever quarter in terms of profit. Despite a lower fleet count and lower miles per tractor, the company increased its truckload revenues by 5% and its per truck per week revenue 15% year over year. Despite similar challenges with container fluidity, the company also saw strong growth in intermodal revenues (19%) and revenue per order (20%). By increasing the spot mix to cash in on great rates, Schneider grew its brokerage volume 24% year over year thanks to its power only service's growth. 

“The third quarter represented the most profitable period in our history,” said Mark Rourke, Chief Executive Officer and President of Schneider. “We continue to effectively utilize our scaled and diversified platform to deliver solutions for the rapidly changing needs of our valued customers. I’m proud of our team’s performance and want to express special appreciation to our professional driver community.”

Rourke went on to say that the strong freight conditions will likely last through 2022 and that it hopes to expand the reach of its asset-light and non-asset offerings.

Revenue: 2021 YTD: $4 billion vs. 2020 YTD: $3.3 billion


                 2021 Q3: $1.4 billion vs. 2020 Q3: $1.1 billion


Income: 2021 YTD: $355.7 million vs. 2020 YTD: $181.6 million


                2021 Q3: $153.7 million vs. 2020 Q3: $63.3 million


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USA Truck loses a few tractors but cashes in on great rates

USA Truck (CCJ Top 250, No. 68) showed strong growth across its trucking division with base revenue per available tractor per week increasing 19.9%. The company tallied 1,750 seated tractors on average, which was down 4.2% compared to Q3 2020. In the company's smaller logistics segment, it saw revenue per load increasing 37% and load count going up 14.4% year over year, though loads were down just under one percent from the previous quarter. 

President and CEO James Reed commented, “We continue to transform the culture of our Company and in doing so we have delivered five straight quarters of record quarterly adjusted earnings per share. Our team set a second consecutive quarterly operating revenue record at $181.0 million and posted a 140 basis point improvement in adjusted operating ratio(a) year over year. 

Revenue: 2021 YTD: $321.6 million vs. 2020 YTD: $280 million


                  2021 Q3: $113.2 million vs. 2020 Q3: $97.3 million


Income: 2021 YTD: $11 million vs. 2020 YTD: 2.9 million


                2021 Q2: $4.4 million vs. 2020 Q2: $3.4 million


U.S. Xpress grows tractor fleet despite the odds

U.S. Xpress (CCJ Top 250, No. 16) saw 149% growth in the tractor fleet of Variant, its digitally recruited, dispatched and managed asset-based fleet of new Freightliner Cascadias. The fleet now stands at 1,283 trucks which have contributed to a 17.5% boost in truckload revenue. 

“During the third quarter, we successfully grew total tractor count sequentially, repriced most of our dedicated portfolio and grew revenue as well as the percentage of loads booked digitally in our Brokerage segment,” said Eric Fuller, President and CEO, U.S. Xpress. “From a financial results perspective, the Dedicated repricing and Variant tractor count growth were both weighted towards the end of the quarter and were outweighed by wage inflation and investments in our digital transformation that we expect to drive long-term profitable growth. We remain on track to exit the year with 1,500 tractors in Variant, and we continue to target doubling our revenues over the next four years.”

Revenue: 2021 YTD: $1.4 million vs. 2020 YTD: $1.3 billion


                  2021 Q3: $491.1 million vs. 2020 Q3: $431.5 million


Income: 2021 YTD: $23.5 million vs. 2020 YTD: $28.5 million


                2021 Q3: $6.6 million vs. 2020 Q2: $15.8 million


—

Werner acquires its way to a stronger fleet

Werner (CCJ Top 250, No. 40) set out to grow its capacity through acquiring an 80% ownership interest in ECM Transport Group for $141.3 million, which brought another 500 trucks and 2,000 trailers into its operation. Operating income decreased slightly, as did total miles, which the company chalked up to parts shortages and COVID restrictions on labor. 

“Werner once again achieved record third quarter earnings per share in a strong freight market with unprecedented supply chain and labor challenges,” said Derek J. Leathers, Chairman, President and Chief Executive Officer. “We made strategic investments in driver pay and driver sourcing that enabled us to organically grow our Werner fleet this quarter in an ultra-competitive driver market. At the same time, we are successfully integrating the ECM truckload fleet acquisition we made at the beginning of the quarter, and ECM is performing very well.

Revenue: 2021 YTD: $1.9 billion vs. 2020 YTD: $1.7 billion


                  2021 Q3: $702.8 million vs. 2020 Q3: $590.2 million


Income: 2021 YTD: $437.4 million vs. 2020 YTD: $339.6 million


                2021 Q3: $71.3 million vs. 2020 Q3: $62.1 million


—

XPO Logistics sets a revenue record

XPO Logistics (CCJ Top 250, No. 6) posted a strong quarter with record revenue, largely driven by truck brokerage, which grew revenue by 62% on a 37% increase in load count per day. The company said it had tripled the number of customers on its XPO Connect digital platform with more than 550,000 drivers downloading the app to date. Growth in LTL was the strongest the company has seen yet, but the segment's "operating ratio was negatively impacted by our decision to continue insourcing purchased transportation in the midst of driver and equipment constraints," according to the release

“Company-wide we had an excellent third quarter, with record revenue and a solid beat on the bottom line. Our truck brokerage business had another phenomenal quarter, while our less-than-truckload results were mixed," said Brad Jacobs, chairman and chief executive officer of XPO Logistics. 

Revenue: 2021 YTD: $9.4 billion vs. 2020 YTD: $7.2 billion

                 2021 Q2: $3.2 billion vs. 2020 Q3: $2.6 billion


Income: 2021 YTD: $422 million vs. 2020 YTD: $75 million

               
 2021 Q2: $112 million vs. 2020 Q2: $138 million


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Yellow Corporation focuses on getting lean amid supply chain challenges

Yellow Corporation (CCJ Top 250, No. 5) invested heavily on improving the quality of the freight that flows through its systems, and saw a 10% revenue driven by LTL revenue per hundredweight jumping 20.7%. The company's operating ratio dropped down to 96.3%, which is its best result since Q4 2018. The company invested in tractors, trailers, tech, box trucks, containers, lift gates and other assets that it says have had a "significant" impact on the fleet. Thus, despite seeing only 65,220 LTL shipments per workday, compared to 70,000 in Q3 of 2020, the company has seen almost a 150% increase in operating income. 

Revenue: 2021 YTD: $3.8 billion vs. 2020 YTD: $3.3 billion


                  2021 Q3: $1.3 billion vs. 2020 Q3: $1.1 billion


Income: 2021 YTD: $47.8 million vs. 2020 YTD: $42.8 million


                2021 Q3: $48 million vs. 2020 Q3: $19.4 million