Truckload and LTL Freight Carriers See Bounce in Shipments

BusinessSales / Service

  • Author Brad Hollister
  • Published October 2, 2010
  • Word count 588

Frozen Food Express Industries (Dallas located frozen food carrier with truckload, less than truckload freight, and third party logistics services) released their financial outcomes for the second quarter of 2010. Frozen Food Express is a major nationwide leading temperature controlled truckload and less than truckload carrier in the domestic United States. The main focus of the carrier is to haul temperature controlled and frozen perishables for the health care, confectionary, and food industries. The carrier in addition has a third party logistics (3pl) division so as to exceed requirements of shippers and some other freight brokerage customers.

The Carrier's CEO reported the carrier had put a larger focus on service excellence and tractor utilization. Mr. Stubbs believes the particular emphasis upon retention of profitable clients will increase margins in truckload and increase tonnage and shipment volume on the less than truckload (LTL) division as well. A combination of an exodus of competitors and decline in available capacity has improved the freight transportation and logistics marketplace. Most of these financial elements allowed Frozen Food Express to minimize their pre-tax loss by more than 41%.

Even with revenue simply creeping up 9%, the use of existing equipment, increase in pricing, and shortage of competition permitted for these enhanced final results. With regard to the last six months however, the operating revenue had dropped even more than 3%. Tractor productivity (measured simply by revenue per truck per week) was also up by much more than 4% throughout the quarter as the market has appeared in order to turn in the favor of the freight carrier. In 2009 Frozen Food Express said they had decided to park a section of their existing tractors until the marketplace came back. Now the company appears to be putting all of them back into operation as the industry continues to strengthen.

Shippers have also been willing to react to the freight marketplace also. Carrier professionals say they have observed a willingness on part of the shippers and logistics firms to adjust pricing in order to reflect the tightening marketplace. Truck Drivers returning to work will definitely help the transportation industry returning to profitability as freight prices escalate off of historically low levels. Many carriers have adopted cost-saving techniques, because losses in the course of the last number of years had been increasing. In the course of second quarter of 2010, the majority of carriers have observed improved results from a combination of a favorable freight pricing environment and outcomes of these carrier cost saving methods.

Frozen Food Express feels a significant element of its success through these turbulent economic times are actually the employees dedication to the company and willingness to seek out new efficiencies in all phases of the operation. The carrier continues to possess a good cash position without financial obligations outside of its credit agreement. Frozen Food Express also has almost seven million dollars in cash, 83 million in investor equity and simply no outstanding debt. While the carrier is in a strong position to weather out the economic climate, the management is devoted on continuing to manage its assets utilization as well as search out additional operational efficiencies.

It seems freight carriers have regained a foothold in the transpiration industry. Several Carriers and third party logistics companies have reported better than expected earnings and narrowed losses due to tightening capacity and reduced overhead. An economic recovery inside the freight industry undoubtedly seems to be underway. Let us hope the momentum allows a sustained financial recovery not only for freight and transportation, but likewise for the broader economy.

FULL STORY HERE

www.freightaccess.com: The Freight and Logistics Marketplace has been tough on truckload and less than truckload carriers. Several market forces have put downward pressure on freight quotes, making cheap freight obtainable through the marketplace. The recent earnings reports by Freight Carriers suggest a come back in freight prices as capacity tightens.

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