Freight Operators’ Profits Are Surging in Strained Supply-Chain Markets
The supply-chain crunch plaguing retailers and manufacturers is providing an earnings bonanza for freight carriers.
U.S. transport companies are logging record profits in a tight domestic transportation market while ocean shipping lines are reaping similar gains on soaring rates to move containers from Asia to the U.S. and Europe.
Schneider National Inc., a large trucking company based in Green Bay, Wis., boosted its net income by 147% to $110 million in the third quarter from the year-ago period and surpassed a quarterly record for earnings per share that the company had set just one quarter before.
Fort Smith, Ark.-based trucking and logistics operator ArcBest Corp. more than doubled its quarterly profit from the year-ago period.
“This quarter, we achieved the highest quarterly revenue and operating income in ArcBest history,” Chief Executive Judy McReynolds said in a Tuesday earnings call.
Denmark-based A.P. Moller-Maersk A/S, the world’s biggest boxship operator, capped a series of rich earnings reports by delivering a $5.44 billion quarterly profit this week, nearly double “the net result for the whole year 2020 in one single quarter,” Maersk Chief Financial Officer Patrick Jany said in a Monday earnings call.
Customers of the transport operators are feeling the pinch in freight markets, as rising transportation costs and other supply-chain woes weigh on earnings for businesses from online retail behemoth Amazon.com Inc. to food companies and auto parts distributors.
“Each link in the supply chain, from shipping lines, port bottlenecks, shortages of trucks and railcars to the increased rework and disruption in production schedules has created an environment where input costs have increased exponentially,” Michael Speetzen, chief executive of sports-vehicle maker Polaris Inc., said in an Oct. 26 earnings call.
Medina, Minn.-based Polaris said logistics, transportation, commodities and other costs increased by more than $100 million in the third quarter from the same period in 2020. In total, the company is reporting more than $300 million in additional expenses due to supply-chain disruptions since the beginning of the year.
Companies are pointing to tight capacity across international and domestic shipping networks, including a crunch in trucking that has driven rates in the sector’s spot market to record highs.
“You literally cannot get a truck,” Peter Bradley, executive chairman of specialty ingredient maker RiceBran Technologies, said in an Oct. 27 earnings call. The Tomball, Texas-based company is trying to mitigate trucking and labor shortages and higher materials costs, Mr. Bradley said, “but a company of our size can’t fix what is a nationwide, world-wide logistics crisis.”
The average spot-market price to hire a big-rig reached $2.86, including fuel surcharges, during October, 19% above the same level last year, according to online freight marketplace DAT Solutions LLC.
David Jackson, chief executive of Phoenix-based Knight-Swift Transportation Holdings Inc., the largest truckload carrier in North America, said supply and demand dynamics dictate market rates in that business.
“Most years for most carriers it produces a single-digit percentage return that is often below their cost of capital,” Mr. Jackson said.
Knight-Swift reported a 68.9% increase in third-quarter net income to $206.2 million, a result he attributed in part to the company’s investments in trucks and trailers during leaner years. That bet is paying off now, he said, as supply chains recognize the benefit of the company’s extra equipment to cope with logistics bottlenecks.
The push to move goods by air, road and ship is providing a windfall for companies that match loads to capacity even as transportation prices rise.
C.H. Robinson Worldwide Inc., the largest freight broker in North America, said its third-quarter net income rose 81% from a year ago, to $247 million, boosted in part by strong gains in its international freight-forwarding business.
Conversations about “transportation budgets are pretty much out the window at this point and it’s about supply-chain reliability, and how are we actually going to get product in and on our shelves?” said C.H. Robinson Chief Executive Bob Biesterfeld.
Actual trends of drug. Read information now.
https://edonlinefast.com what are ed drugs
drug information and news for professionals and consumers. Get here.
hollywood casino online is canadian pharmacy legitimate write me a paper
altace usa arcoxia 60mg pill brand arcoxia 60mg
Deja una respuesta
Lo siento, debes estar conectado para publicar un comentario.