“Higher fuel prices continued to take a great toll on our operations in the second quarter,” said President and COO Gail B. Cooper. “With fuel costs running about 30% higher this year, this single expense accounted for a 300 basis point deterioration in our operating ratio versus the second quarter last year and about half of the overall drop in net income for the period.”
Cooper also noted that higher fuel costs have significantly diminished profits available to its owner-operators, causing attrition in the owner-operator fleet, particularly in its Welborn division. In its Boyd Bros. division, the departure of some owner-operators has forced the company to assimilate power units into company-owned operations. “Thus, even though we have seen an increase on Boyd’s load counts, this increase in trucks together with a decline in company drivers has resulted in more empty trucks and in turn has hurt our fleet utilization,” he said.
Higher fuel costs, higher interest rates, reduced efficiency and lower gains from used equipment raised the company’s second quarter operating ratio to 95.7% from 91.3% in second quarter last year. For the first half of 2000 the company’s operating ratio is 95.8% compared to 92.9% a year ago. Owner-operators account for about 40% of the company’s fleet, down from 50% last year.
Cooper said they were especially disappointed with the results from its Welborn division and have taken steps to improve performance and competitive position. The biggest change was the elimination of Welborn’s logistics and specialized operations which, he said, were only marginally profitable and accounted for a large part of the division’s second quarter revenue decline.
Boyd Bros., based in Clayton, Ala., is a flatbed carrier specializing in high-volume, time-sensitive service to the steel and building materials industries.