Schneider National (CCJ Top 250, No. 6) reported third-quarter earnings more than doubled from a year ago as price increases, productivity gains and cost cuts offset a thinner truck fleet. Executives said capacity remains constrained by driver availability, elevated operating costs, increased barriers to entry and regulations.
The multimodal transportation carrier posted operating revenue of $1.59 billion for the first three months ended Sept. 30, up 9% from $1.45 billion a year earlier. Revenue excluding fuel surcharges rose 3% to $1.35 billion.
Net income climbed 155% to $49.5 million, compared with $19.4 million in the third quarter of 2025.
The supply side of the market is still doing the heavy lifting, said Jim Filter, Schneider’s president and CEO, during the company’s earning calls with analysts.
Capacity attrition slowed from the pace of the first half of the year, he said, but the overall picture is still tight. “Capacity is still constrained,” he said. “You’re not seeing growth of long-haul truck drivers despite the fact that spot rates have been increasing over the course for almost a full year at this point.”
He pointed to entry-level driver training as the biggest factor. About 50,000 long-haul drivers entered the market in 2021 and 2022, he said, many with less than a week of training to earn a CDL and at very low-price points. Current standards now call for five to six weeks of training at higher cost.
Ongoing federal enforcement on entry-level driver training and electronic logging devices should improve driver qualification and hours-of-service compliance, Filter said. That makes it harder for what he called “irrational capacity” to enter or stay in the market.
Cost pressure is an additional squeeze—a common factor mentioned by public traded carriers, including Old Dominion Freight Line (No. 9), Werner (No. 14) and J.B. Hunt (No. 5).
Fuel and fuel taxes rose 48% year over year to $165 million, and Filter said driver wages are climbing while smaller carriers face growing economic strain. Together, he said, those forces limit how quickly supply can respond to better pricing.
Filter was uncertain whether capacity has bottomed, saying there could be “a little bit more reduction” before the market begins to flatten out. When capacity does return, he said, pricing levels should support it, and “companies like Schneider” will be able to participate.
He said that would be a change from the last cycle, when carriers like Schneider wouldn’t hire drivers from one-week CDL schools.
Spot rates moderated during the quarter by more than the usual seasonal pattern, particularly in August, after strength in late spring and early summer. They remained well above year-ago levels and began improving again in September, Filter said.
Freight volume reflected typical seasonality and some inventory normalization rather than weakening demand, he said.
Shippers are noticing tightness. Filter said some customers are voicing concerns about capacity. Some bid strategically to lock in reliable capacity for the full year, while others take a wait-and-see approach, he said.
Pay raises tied to rate recovery
Schneider is spending on drivers but doing it selectively. Executives said its commercial strategy is funding more investments in driver capacity, including recruiting resources, broader use of AI-enabled tools, and selective pay increases and sign-on bonuses in its constrained markets. Its compensation approach rewards driver productivity and performance.
Filter attributed Schneider’s ability to navigate the challenging hiring environment to disciplined compensation practices. “We align pay increases to rate recovery,” he said, ensuring customer-facing teams, recruiters, operations and drivers share the goal of growing “safe, reliable capacity.”
He said raises are targeted “where the returns are commensurate,” and that pay alone won’t solve the problem. “You can’t just throw money on it,” he said.
Besides driver experience, he said it’s also about freight selection, work configurations, how drivers are treated, and using AI to respond to them faster. Filter said intermodal’s truck count is already growing sequentially because of the company’s approach.
The Truckload numbers reflect the trade-off between fleet size and productivity. Total average trucks were 11,347 vs. 12,291 a year ago. Network averaged 3,296 vs. 3,819, while Dedicated averaged 8,5051 vs. 8,472.
Filter said tractor counts continue to be constrained by driver availability and the previously announced loss of a large Dedicated customer. Revenue per truck per week offset much of the decline, rising 8% in Truckload overall.
Schneider said Dedicated customers are increasingly open to the pricing adjustments needed to secure capacity in the current driver market.
Segment results
- Truckload: Revenue excluding fuel surcharges was flat at $624.8 million, but operating income more than doubled to $43.7 million. The operating ratio improved 380 basis points to 93%.
- Intermodal: Revenue excluding fuel surcharges rose 2% to $287.7 million, and operating income increased 35% to $22.6 million. Operating ratio improved 190 basis points to 92.1%. Orders slipped to 114,619, ending a nine-quarter growth streak, while revenue per order rose 3% to $2,486 despite shorter lengths of haul. Filter said Intermodal rates increases are running “comfortably in the mid-single-digit range.”
- Logistics: Revenue excluding fuel surcharges rose 12% to $372.5 million, driven by higher revenue per order and partly offset by lower brokerage volume. Operating income decreased $6.4 million, and the operating ratio hit 100%.
Cash, debt and the outlook
Looking ahead, Darell Campbell, executive vice president and chief financial officer, told analysts the outlook assumes continued pricing improvement, while noting that peak season demand and driver capacity remain variables.
Filter said peak season so far “looks like normal peak season demand patterns” for the first time in roughly a decade, with e-commerce demand late in the quarter a swing factor.
Schneider said it remains on track for its $40 million structural cost savings target. The carrier ended the quarter with $326.2 million in cash and $393.6 million in debt and finance lease obligations.
