Based on its proprietary Truckload Index, equity research firm Morgan Stanley says capacity is increasing as new equipment comes online. At the same time, the spring shipping season is off to a slow start, reflecting weakness in March retail sales figures.
Fuel prices have presented problems for carriers, however. Truckload carriers will likely recapture most, but not all, of the higher fuel costs from shippers, the report says.
Truckload carriers have been announcing strong profit performance in the first quarter.
J.B. Hunt Transport reported improved revenue per tractor per loaded mile in the first quarter. Exclusive of fuel surcharges, Hunt’s revenue per loaded mile was $1.68, up 8.3% over the same period in 2004. The truck operating ratio for the quarter was 89.5, a 3.5-point improvement from 93.0 in first-quarter 2004. Operating revenues for the first quarter were $714.1 million. Fuel and fuel taxes rose to $82.9 million in the quarter, up 29.8%. As a percentage of revenues, fuel related costs were 11.6% vs. 10.3% in the 2004 first quarter. Net income for the quarter was $47.5 million, a 44% increase over the prior-year period.
Heartland Express reported $118.7 million in operating revenues in the first quarter, up 11% from 2004. It reported a corresponding 11% increase in operating income, reporting $22.1 million for the quarter. It’s operating ratio for the quarter was 81.4.