Forward Air’s tonnage declines cool as Q2 advances

Asset-light trucking company Forward Air announced Tuesday that tonnage was down 8% year over year (y/y) for the first two months of the second quarter.

Forward (NASDAQ: FWRD) noted the severity of the y/y declines has eased as the second quarter has progressed. Tonnage in its expedited segment, which includes less-than-truckload, truckload and final mile, was down 9.4% y/y in April and 6.4% in May. Continued improvement was also seen in the first couple of days in June.

The quarter-to-date tonnage decline was the combination of a 12% y/y drop in shipments, which was partially offset by a 4.7% increase in weight per shipment. Higher shipment weights were driven by a 10.2% increase in weight per piece. The heavier weights were a drag on revenue per hundredweight, or yield, which was 6.3% lower y/y excluding fuel surcharges.

Given the work the company has done to attract heavier, higher-value freight to the network, and the negative impact it has on yield calculations, management has begun to disclose revenue per ton mile, which was 2.1% higher y/y in the period. Management said the metric during the two-month period was the highest it has ever been.