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SURFACE & DOMESTIC TRANSPORTATION TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION 34 THE JOURNAL OF COMMERCE www.joc.com NOVEMBER 24.2014 By William B. Cassidy THE LARGEST U.S. trucking companies got bigger and more profi table and handled more freight in the third quarter, as a faster-growing economy put more freight on the highways. The growth of these carriers in the quarter was limited only by diffi culty putting drivers into trucks. As industrial output and containerized imports increased, the freight economy gained muscle. Industrial production dropped in August but turned upward in September, as manufacturing activity grew for the 16th straight month, according to the Institute for Supply Management. The U.S. economy isn't booming, but as unemployment declines — it reached 5.8 per- cent nationwide in October — and gas prices at the pump fall below $3 a gallon, consumer confi dence is improving, driving hope for a stronger-than-typical fourth quarter. The June-September period represented the fourth of the past fi ve quarters in which U.S. gross domestic product expanded at a 3.5 percent rate or faster, and carriers often outpaced that growth. U.S. shippers paid more for surface transportation, as tight capacit y and rising demand gave truckload and less-than- truckload carriers decisive pricing power, refl ected in increases in LTL revenue per hundredweight and truckload revenue per tractor per week. The 21 public motor carriers tracked by The Journal of Commerce increased their combined revenue by 10.7 per- cent year-over-year in the third quarter to a combined $10.7 bil- lion, a $159.2 million gain from the second quarter, when the trucking group increased rev- enue 12.2 percent. The third quarter of 2014 was only the sec- ond quarter the trucking group's combined revenue surpassed $10 billion, and the second quar- ter of double-digit percentage growth in revenue. The trucking companies' performance spotlights the gen- eral improvement in the U.S. economy — the third quarter marked the beginning of the sixth year of the U.S. economic recovery — over a more anemic 2013. Even in the weather-beaten fi rst quarter, the public trucking companies increased revenue by 9 percent, a higher rate than in the previous eight quarters. In the fi rst three quarters of 2014, the trucking group increased revenue on average by 11 percent, compared with 2.6 percent in the same nine-month period of 2013. In the third quarter, the pub- lic truckload companies tracked by The Journal of Commerce increased their combined rev- enue by 11.9 percent from a year 3RD-QUARTER BOUNCE Publicly owned trucking companies gain traction as cargo volumes increase in an improving U.S. economy $6,500 ■ TL ■ LTL Combined quarterly revenue of public companies tracked by the JOC, in millions of dollars. 2011 LTL TL 1Q $4,696.0 $3,144.9 2Q $5,289.1 $3,556.1 3Q $5,362.0 $3,675.1 4Q $5,151.0 $3,713.1 2012 1Q $5,099.5 $3,473.5 2Q $5,525.8 $3,707.0 3Q $5,526.0 $3,783.2 4Q $5,317.0 $3,845.0 2013 1Q $5,182.4 $3,531.8 2Q $5,636.3 $3,787.5 3Q $5,755.7 $3,940.0 4Q $5,544.5 $4,082.4 2014 1Q $5,492.8 $4,008.3 2Q $6,158.2 $4,419.6 3Q $6,326.5 $4,410.5 Source: Company reports, JOC analysis JOC TL, LTL GROUP REVENUE THIRD QUARTER AT A GLANCE Revenue and profi t (or loss), in millions of dollars, followed by year-over-year percentage change, for the largest publicly owned LTL and truckload carriers in the third quarter. LTL REVENUE % CHANGE PROFIT (LOSS) % CHANGE FedEx Freight* $1,610.0 13.0% $168.0 70.0% Con-way Freight $946.3 5.2% $71.9 39.4% YRC Freight $843.0 4.2% $8.8 NA ODFL $743.6 20.6% $77.9 29.5% UPS Freight $697.0 6.4% NA NA YRC Regional $479.6 8.0% $24.4 22.0% ABF Freight $523.4 11.1% $24.7 43.7% Saia $332.5 13.5% $16.3 26.1% Roadrunner $151.1 4.8% $5.5 -98.2% TOTAL $6,326.50 *FedEx Freight data is for fi scal quarter ending May 31 2014. All others, June 30. TRUCKLOAD REVENUE % CHANGE PROFIT (LOSS) % CHANGE Swift $1,074.9 4.1% $50.2 67.5% Landstar $819.3 21.3% $36.8 25.7% Werner $552.0 8.0% $26.0 22.2% Universal $261.7 15.5% $13.1 -4.4% Knight $271.5 13.5% $25.1 66.7% Roadrunner $262.9 54.5% $18.5 71.3% Covenant $177.6 3.9% $1.9 -5.0% Celadon $193.4 10.5% $8.0 21.2% Marten $171.6 2.7% $7.7 -3.8% Con-way Truckload $159.2 -1.8% $10.7 19.2% USA Truck $153.6 8.3% $2.7 NA Heartland $217.1 66.2% $22.7 43.3% JB Hunt Truck $95.7 -1.0% $4.3 569.0% TOTAL $4,410.50 NA = Not Applicable or Not Available. UPS Freight does not declare operating profi t. Source: Company reports