Watch Now

Daseke sees weak freight market for rest of 2023

Texas flatbed carrier lowers outlook for 2nd consecutive quarter

Flatbed truckload carrier Daseke posted second-quarter revenue of $407 million and earnings per share of 7 cents, year-over-year declines of 15% and 71%, respectively. (Photo: Jim Allen/FreightWaves)

Daseke Inc. officials said the freight market may have bottomed out in the second quarter, as the company reported year-over-year (y/y) declines in revenue and earnings per share.

“Today, Daseke’s updated outlook now assumes no improvement in current freight market conditions in the second half of the year,” CEO Jonathan Shepko told analysts during a call on Thursday. “The supply-demand relationship remains unbalanced, with demand elusive and carriers exiting the industry at a much more sluggish pace than they entered the market in 2021 and 2022.”

The Addison, Texas-based flatbed and specialized transportation provider posted second-quarter revenue of $407 million, a 15.3% year-over-year decline compared to the same period last year.

Daseke (NASDAQ: DSKE) recorded net income of $6 million in the second quarter, or 7 cents per share, a 71% y/y decrease compared to $18 million, or 24 cents per share during the same period in 2022.

The company missed on key Wall Street estimates, which called for earnings per share of 24 cents and revenue of $423 million during the second quarter.

Daseke’s adjusted earnings before interest, taxes, depreciation and amortization is now forecast in a range of $200 million to $210 million for 2023, modestly lower than the previously guided range of $210 million to $220 million.

Shepko said the company’s flatbed operations in the Pacific Northwest saw “demand degradation” in the building materials market.

“In the Pacific Northwest … about 30% or so of our overall portfolio is made up of construction, and probably 20% of that is residential-facing,” Shepko said. “A lot of that material sits in the Pacific Northwest, so they do a lot of building materials … roofing shingles, lumber, and we just haven’t seen inventory drawdowns up there at the kind of retail or supplier level or at the manufacturing level, wholesaler level. So things are absolutely sitting there.”

In comparison, Daseke’s flatbed operations in the Southeastern has been producing better results.

“Our Southeast flatbed segment, which is probably about 80% of our total Southeast composition, did very well,” Shepko said. “They executed and drove improved productivity. They looked to diversify their end markets and get out of more volatile end markets. They picked up additional dedicated business. They’re really shifting their sales teams to find more dedicated business to provide that kind of baseload and that resiliency.”

Shepko said to offset the weak freight market, the company tightened its balance sheet and enhanced its EPS — using excess cash to reduce higher-cost components of its capital structure, reducing gross debt and lowering ongoing costs. 

“We remain focused on improving our operational efficiency and leaning into our asset-right strategy to dampen the impact of the contracting freight environment from its historic highs of the second quarter of 2022,” Shepko said.

DasekeQ2/23Q2/22Y/Y % Change
Total revenue$407.3M$481.3M(15.3%)
Freight revenue $162M$173.3M(6.5%)
Brokerage revenue$40.6M$44.3M(8.4%)
Average company tractors2,0501,871(9.6%)
Freight revenue per tractor$66,800$74,500(10.3%)
Total miles (millions)48.648.9(1%)
Adjusted OR%90.4%88%2.7%
Freight revenue$121.7M$132.4M(8%)
Brokerage revenue$22.6M$47.6M(53%)
Average tractors2,4302,3593%
Freight revenue per tractor$50,400$57,000(12%)
Total miles (millions)
Adjusted OR%95.1%87.7%8.4%
Adjusted earnings per share$0.07$0.24(71%)
Daseke’s key performance indicators.

Click for more FreightWaves articles by Noi Mahoney.

More articles by Noi Mahoney

Hub Group’s Q2 earnings tumble in ‘challenging’ freight economy

Mexico, Port Laredo remain on top for US trade

Borderlands: $18B LNG export terminal project moves forward at Texas seaport

F3: Future of Freight Festival


The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.

Leave a Reply

Your email address will not be published.

Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Florida, Maryland and Texas. Contact [email protected]