First quarter profits were down 34.3% from the previous quarter for the 31 carriers that have now reported financial results for the January - March period. After three quarters of strong gains, profits have dipped 3.3% below the 1st quarter of 1999.
Two carriers reported a smaller loss from the previous quarter - Consolidated Freightways and Frozen Food Express Industries - and two other reported a profit gain - Simon Transportation Services and Heartland Express. The other 27 carriers blamed higher fuel prices for the poorer operating results. Some carriers likely aggravated their poor quarterly results by taking one - time charges in a period when investors already expected weak results.
If fuel costs were the only problem in the first quarter, truckload carriers would have taken a much bigger hit than LTL carriers. But LTL carriers actually suffered a 43.7% drop in profits compared to 34% decline for TL carriers. LTL carriers are still struggling with their legacy of expensive operating costs and heavy new costs to enter the Internet age.
Tank, flatbed and refrigerated carriers continue to struggle. Only half of then reported timely financial results. A number of them delayed reporting due to audits to restate prior results, stock market delisting proceedings and merger discussions.

First quarter sales revenues were even with the prior quarter instead of the usual seasonal decline. LTL carriers had a 10.2% sales increase. For all 31 carriers, sales are 10% above the 1999 quarter, quite close to our estimates of an 8.0% volume gain and a 4% rate gain over the past year.
Expect carriers to recover much of the 1st quarter profit decline during the April-June period. Both freight rates and freight volume are expected to increase at least 1.5% this quarter while diesel prices average several cents a gallon lower.