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which Welch labeled “excellent
companies.”
Those three regional companies
posted a combined operating ratio
(OR) of 93.5. Except for industry
profit leader Old Dominion Freight
Line (85.1), that is the best OR
posted by any publicly held regional
LTL carrier during the less-thanrobust
third quarter the ended
September 30. For the first nine
months, YRC regional posted a
combined 95.1 OR.
David Ross, the respected trucking
analyst for Stiefel Nicolaus,
credits Welch and the new YRC
management team with “getting
tough” with low-paying shippers
who have enjoyed rock-bottom rates
from YRC the past five years. “Those
days appear to be over,” Ross said.
For the last several quarters, Ross
said that he’s been waiting for YRC
Freight to “get tough” with some of
its large national accounts and get
rates up. In the third quarter, there
was evidence YRC was doing just that.
It enjoyed a 3.4 percent year-over-year
yield increase at the expense of losing
some business, as tonnage declined
4.6 percent per day year over year. But
yields rose, and YRC was able to report
a slight positive operating margin.
“YRC Regional was the rock star,”
Ross said in a note to investors. “We
still believe, however, that capex and
pension payments are the critical issues
facing the company, and we do not
know where the money will come from
to pay for new equipment and pay its
retirees.”
—John Schulz, Contributing Editor
INTERMODAL
Domestic intermodal leads the way for
third quarter growth, reports IANA
CALVERTON, Md.—Despite an
uncertain economy, intermodal volumes
remain on a steady path, according
to the most recent edition of the
Intermodal Market Trends & Statistics
report from the Intermodal Association
of North America (IANA).
Second quarter intermodal loadings—at
3,768,155—were up 3.2
percent annually, which was less
than the second quarter’s 5.2 percent
annual growth gain but topping the
2.9 percent annual improvement in
the first quarter.
For the quarter, three of the four
major intermodal equipment categories
tracked by IANA showed growth
and were paced by domestic containers,
which posted an 11.2 percent
annual hike. All domestic equipment
was up 5.8 percent, and international
containers were up 0.9 percent. The
lone category on the decline for the
quarter was trailers, which dropped
10.7 percent.
In its analysis of the report, IANA
pointed out that domestic containers
were responsible for nearly all of
the quarter’s growth. It added that
the growth is likely coming from an
increase in market share as more freight
is shifted from over-the-road trucking
and trailers. What’s more, IANA said
that domestic containers have substantial
room to gain share in most U.S.
regions.
Making the domestic gains even
more impressive is that the third quarter
showed growth at a time when there
were myriad warning signs about the
economy, including prolonged economic
uncertainty on a political level,
cautious consumer spending, high
unemployment, and slower manufacturing
output. Third quarter loads also
eclipsed the 1.4 million mark for the
first time.
“Domestic containers continue to
grow in double digits…this is the fourth
quarter in a row,” said IANA President
and CEO Joni Casey. “If the housing
market starts to pick up as it appears it
is finally doing, this trend should continue
well into next year.” Casey said
that the same general factors are contributing
to this growth—truck competitive
rail service, fluctuating fuel prices,
continuing shortages of truck drivers,
more stringent regulatory environment
on motor carriers, and over-the-road
capacity issues.
She added that domestic intermodal
continues to benefit from increasing
buy-in, as shippers transition to
intermodal from straight over-the-road
movements. “Once they are making
that switch they are staying with it,”
said Casey.
While international volumes were
up, IANA said the slow growth rate,
which was down from the second
quarter’s 3.9 percent annual boost,
was largely due to lighter port volumes
because shippers have been reluctant
to bring in more cargo resulting in
higher inventories.
As an example, IANA noted that the
Ports of Los Angeles and Long Beach
posted a 0.4 percent decline in third
quarter container imports, while international
intermodal volumes in the
Southwest dropped 6.3 percent during
the quarter.
“International volumes softened in
the third quarter probably based on
earlier bumps in volume increases that
resulted in higher inventories,” said
Casey. “Some stakeholders have predicted
another spike in October and
12 LOGISTICS MANAGEMENT WWW.LOGISTICSMGMT.COM | December 2012