A sluggish freight environment coupled with higher operating costs is forcing many carriers to tighten their belts and look to smaller, more profitable niches.
“In a difficult economy where opportunities to improve margin are limited, operational execution becomes critically important,” said Douglas Stotlar, president & CEO of Con-way Inc., in his company’s year-end earnings report “We took specific actions in 2007 to respond to the market and reposition our businesses. This will continue into 2008, as will our focus on providing customers with reliable, premium-value LTL and truckload transportation services.”
While Con-way’s revenue increased 20.2% to $1.2 billion in the fourth quarter last year compared to the same period in 2006, net income dropped by well over 50% to $34.5 million. For 2007, revenues increased 3.9% to $4.39 billion compared to 2006, while net income again fell significantly to $146.8 million for the year from $265.2 million in 2006.
Trucking freight rates are also increasingly under pressure as shippers step up their efforts to lower transportation costs. “Trucking capacity in our industry continued to outstrip freight demand during the fourth quarter [in 2007] and overall truck tonnage declined,” noted David Parker, chairman, president & CEO at Covenant Transportation, in his firm’s year-end release. Full Story....