Con-way, ODFL Offer First Quarter Performance Preview
The parent of the less-than-truckload operation, Con-way Freight, recently provided an update on first quarter trends of this part of its business, ahead of it releasing first quarter financial results the first of May while competitor Old Dominion Freight Line did the same just before a freight transportation summit in Chicago last week.
Two major less-than-truckload carriers, Con-way Freight and Old Dominion Freight Line, provided updated on first quarter trends.
Con-way Inc. says weight per day in the first quarter of 2013 for its LTL subsidiary is expected to be down approximately 1.5% compared to the first quarter of last year. Revenue per hundredweight, excluding the impact of fuel surcharges, is expected to increase approximately 3.5% over the same period.
The company noted several items during the first quarter will negatively affect near-term profitability, including a reserve for a large vehicular claim, a charge related to a transition to new technology, costs associated with adverse weather, and field training expenses pertaining to line-haul optimization. Collectively, these items are expected to impact Con-way Freight's first quarter 2013 operating income by approximately $14 million.
"Tonnage trends, while below last year, have been relatively stable throughout the first quarter and our core operational performance is trending in the right direction," says Douglas W. Stotlar, Con-way Inc. president and CEO. "Despite the near-term cost headwinds at Con-way Freight, confidence in our key initiatives and the ability to expand margins, particularly in the second half of 2013, is being reinforced each day."
The company says the key 2013 initiatives at Con-way Freight, while still in early stages, are on track with internal projections. Lane-based pricing and line-haul optimization are expected to provide increasingly improved results as the year progresses.
Old Dominion Freight Line also updated its expectations for growth in the first quarter. It now expects total tons for the first quarter to increase 4.5% to 5% compared with the first quarter of 2012. That's up from from its previous forecast of 4% to 4.5%.
However, the company is sticking with earlier announced expectations of an increase in first-quarter 2013 revenue per hundredweight, excluding fuel surcharge, in a range of 2.5% to 3% compared with the first quarter of 2012.
It says based on the expected increase in total tons and pricing, improvement will be seen in its operating ratio for the first quarter of 2013 compared with the first quarter of last year.
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