ODFL’s third quarter update highlights domestic economic softness

The Thomasville, N.C.-based carrier reported that revenue per day in August was down 0.7% annually, attributing that to a 5.2% decline in LTL tons per day that was partially offset by an increase in LTL revenue per hundredweight.

By ·

Earlier this week, national less-than-truckload (LTL) carrier Old Dominion Freight Line (ODFL) provided guidance for key operating metrics in August.

The Thomasville, N.C.-based carrier reported that revenue per day in August was down 0.7% annually, attributing that to a 5.2% decline in LTL tons per day that was partially offset by an increase in LTL revenue per hundredweight. ODFL said that the decline in LTL tons per day was due to a 1.2% decrease in LTL weight per shipment and a 4% decline in daily LTL shipments.

On a quarter-to-date basis, ODFL said that LTL revenue per hundredweight and LTL revenue per hundredweight, excluding fuel surcharges, were up 4.8% and 6.1%, respectively on an annual basis.

“Old Dominion’s revenue results for August reflect continued softness in the domestic economy as well as a decline in fuel surcharges,” said Greg C. Gantt, ODFL President and Chief Executive Officer, in a statement. “While shipments decreased on a year-over-year basis, we remained committed to our disciplined yield management process. The 4.8% increase in revenue per hundredweight, which also includes the favorable effect from the decrease in LTL weight per shipment, was supported by a stable pricing environment and our ability to deliver superior service to our customers.”

On ODFL’s second quarter earnings call, Gantt said that the company has seen general softness with demand, coupled with mixed economic signals, while added that he believes ODFL is continuing to win market share and maintaining its price discipline while doing so. He attributed that to the company’s ability to win market share, and its  “superior service offering delivered at a fair price.”

As for the second half of 2019, he said, at the time, that ODFL will continue to focus on controlling our cost, saying he expected softer demand to continue, with ODFL well positioned to respond to any acceleration in volumes that might occur if the domestic economy regains momentum.

In a previous interview with LM, Gantt said ODFL is busy across the entire market, whether it is the industrial economy, the retail economy, and everything else it is in, like its medical business, for example.

“It really applies to all aspects of our industry relating to our customers’ business lines,” he said. “There is some impact on the last-mile side, too, and there are some different ways to ‘skin that cat’ by hauling product out from the Amazon’s of the world and deliver it to somebody’s home. That is one aspect.  A company like Amazon not only has last-mile, they also have middle mile, with somebody bringing freight into a DC that does not always come in as a truckload. A lot of it arrives via LTL, and we think that is where we fit maybe in many cases better than in the last-mile piece of that business. But we have outlets for that, too.”

Robert W. Baird and Co. analyst Ben Hartford wrote in a research note that ODFL’s third quarter to date tonnage trends are consistent with weak data points from August, including the ISM’s August manufacturing data, which entered contraction territory after 35 consecutive months of growth

“ODFL cited continued softness in the domestic economy as primary driver of softening trends,” he wrote. “Recall, July trends also reflected weakness (July 2019 tons per day decreased -6% yoy, weight per shipment -0.7% yoy). Trends announced [by ODFL] are likely slightly below our/consensus expectations.”

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

LTL · ODFL · Owens-Corning · All Topics
Latest Whitepaper
Are Your Profits Taking a Hit in This New Retail Environment?
This whitepaper aims to provide a better understanding of whether it might be a solution for your retail supply chain operations.
Download Today!
From the September 2019 Logistics Management Magazine Issue
For me, September is the time to make a fresh start. It’s the beginning of new school year for the kids; a new college and professional football season ramps up; and, of course, conference season for nearly all professions is about to get into full swing.
IMO 2020 is Coming to Town: Will the spiking cost of fuel cause you pain?
Cold Chain/ Food Logistics: Setting the standard for cold chain
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly newsletter!
Latest Webcast
The State of Rail/Intermodal Markets. Volumes are down, but the future looks bright
In this webcast, our panel will provide a comprehensive update on the current state of the rail/intermodal markets and offer an in-depth look at the pain points shippers have been experiencing (service challenges, precision scheduled railroading (PSR), rates, capacity management) and offers shippers advice on how to prepare for the Q4 2019.
Register Today!
Masters of Logistics 28th Edition: Find your digital direction
Given the number of available and emerging digital solutions capable of transforming and improving...
36th Annual Quest for Quality Awards: Winners in the spotlight
Which carriers, third-party logistics (3PL) providers and U.S. ports have reached the pinnacle of...

State of Logistics in 2019: What’s next?
Tight capacity, high rates, rapid e-commerce growth and a booming economy fueled an 11.45% rise in...
Got labor? How supply chain companies are recruiting talent during a labor crunch
How are companies faring in the race to recruit and train high-level supply chain talent in a market...