Multi-regional less-than-truckload (LTL) carrier Old Dominion Freight Lines joined national LTL carriers Yellow Roadway Corp. and Overnite in issuing earnings guidance reflecting stronger-than-anticipated volumes and improved pricing.
A strengthening economy and the closure of USF Red Star contributed to improved results for North Carolina-based Old Dominion. Also contributing to Old Dominion's positive outlook are the effects of a driver shortage in the truckload sector and changes to the Hours of Service rules this past January, which led many shippers to begin shifting truckload volumes back to LTL, according to analyst firm Legg Mason. (Ramifications of the repeal of those Hours of Service rules are unclear at this writing; see cover story.)
Old Dominion's expansion into the Midwest region helped it benefit from the developing manufacturing recovery over other carriers that don't have the same concentration in the region or in those freight markets, reports Legg Mason.
The Red Star closure put freight that equates to $250 million in annualized revenue back into the market. Old Dominion had increased its capacity in the Northeast just before the Red Star closing.