Truckload carriers J.B. Hunt, Heartland Express and Werner Enterprises reported first-quarter financial results that reflect significant growth in freight volumes and revenues — the result of increased demand and higher rates — and less impact from hours of service (HOS) rules that went into effect in January.
Heartland Express covered a three-cent-per-mile driver pay increase that was phased in during the first quarter with higher-than- expected revenue growth. Describing the current truckload market as “the best seller's market in 20 years,” equity research firm Morgan Stanley says it is apparent that Heartland improved margins in the face of driver pay increases and the impact of HOS by passing those costs along to shippers.
J.B. Hunt posted earnings per share that were nearly double the industry consensus. Though Hunt was expected to show a negative impact from HOS, its equipment utilization improved by 1.8%. Aggressive pricing over the last two years has helped it achieve a 6.3% increase in revenue per loaded mile in the first quarter.
Performance issues on the Union Pacific (UP) railroad could benefit Hunt's intermodal division as shippers divert freight from UP (more than 90% of Hunt's intermodal freight moves on the Burlington Northern or Norfolk Southern railroads).
Werner Enterprises, which also reported positive trends on equipment utilization, did so on a length-of-haul that dropped by 12.5% due to changes in freight mix.