LTL carrier Old Dominion cites focus on service and network expansion as drivers behind profitable 2014, even as fuel surcharges eroded in fourth quarter.
The less-than-truckload carrier Old Dominion Freight Line said operating profit rose 46.1 percent year-over-year, to $112.1 million, in the fourth quarter of 2014.
For the calendar year, operating profit rose 29.8 percent, to $267.5 million. The company’s revenue for the year rose 19.3 percent year-over-year, to $2.8 billion, while it rose 21.7 percent, to $721 million in the fourth quarter.
“Our revenue growth once again reflects increased market share, which we attribute to our employees’ ability to provide superior on-time and claims-free service at a fair and equitable price,” said David S. Congdon, president and chief executive officer of Old Dominion. “The Company’s strong financial results for the quarter reflect improved freight density and yield. LTL tons per day increased 19.8 percent for the fourth quarter on a 17.1 percent increase in shipments and a 2.3 percent increase in weight per shipment. LTL revenue per hundredweight increased 1.5 percent, despite the decline in fuel surcharge rates, decrease in length of haul and increase in weight per shipment, each of which generally has the effect of lowering this yield metric.”
Congdon emphasized Old Dominion’s focus on service and investment in its network, equipment and technology. “We invested heavily in the capacity and capabilities of our network, equipment and technology in 2014, which has further differentiated Old Dominion in a capacity-constrained industry.”
Old Dominion has been the top performing carrier in the LTL industry for years, according to the investment bank Stifel’s transportation and logistics research group.
Improving yield drives Old Dominion profits, revenue in Q4
