The gain in the American Trucking Associations' (ATA) For-Hire Truck Tonnage Index was a modest 1.6%, but that looked better than the 3.1% decline in January. In looking at the small increase from January's numbers, the ATA's chief economist, Bob Costello, felt that the increase from January combined with a relatively small decrease of 1.7% for the Index year over year, should not be taken as the norm.
“Freight levels remain challenging,” notes Costello, “despite some anecdotal reports of better volumes in late March. At this time, however, it is difficult to ascertain whether those reports are due to seasonal blips or an underlying trend. We continue to look to the second half of 2007 for better tonnage volumes. But we shouldn't expect a robust rebound in freight during 2007.”
Major trucking companies have felt the pangs of reduced volumes as they report financials on their most recent quarters. Convenant Transport, Inc., undergoing a business realignment, looked at harsh weather in February and early March as a contributing factor in its results. “From a revenue perspective,” says David R. Parker, the carrier's chairman, president and CEO, “the first quarter freight market featured a decline in truck tonnage and numerous requests for bid packages from customers.” For its first quarter, Covenant's total revenues increased 9.8%, while its freight revenues that exclude fuel surcharges increased 10.9%. However, the company did have a net loss of $2.1 million when compared to its net loss of $884,000 last year for the same quarter.
Increases in operating revenue for JB Hunt Transport Services came from its Intermodal, Dedicated Contract Services and Truck business. Total operating revenue for the quarter was up 2% at $797.45 million. Despite the growth, the carrier's first quarter net earnings of $44.17 million were down nearly 11% year over year.
In looking at slightly lower than expected revenues for the early part of 2007, Henry Gerkens, president and CEO of Landstar System, Inc., claims that, “During the first month and a half of the 2007 first quarter there was downward pressure on price caused by lower volumes and more available capacity. However, as we moved into the second half of the quarter pricing began to stabilize and volume levels improved.” Operating margin for the carrier during its first quarter is 6.4%. Revenue during the quarter was $577 million. Landstar's carrier group had $424 million in revenue, compared with 2006's $428 million. The global logistics group had revenues of $144 million compared to $173 million last year.
