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Hot LTL market carries into 2022

Comps impress even after stripping out tailwinds

Old Dominion's revenue was up nearly 50% on a two-year stacked comp in February. (Photo: Jim Allen/FreightWaves)

Less-than-truckload carriers see strong demand trends from 2021 carry into what is normally the slowest part of the year. First-quarter updates from a couple of carriers Thursday highlighted robust revenue growth, driven by double-digit yield increases and higher volumes.

Old Dominion Freight Line (NASDAQ: ODFL) reported a 38.3% year-over-year increase in revenue during February, following a previously disclosed 25.7% increase in January. Tonnage jumped 18.3% in the month (+7.7% in January), with revenue per hundredweight, or yield, increasing16.8% in each of the first two months of the quarter.

The February comps benefited from severe winter storms during February 2021, which shut down portions of some carrier networks multiple times.

The growth trend was a little smoother on a two-year stacked comparison. Old Dominion’s revenue was 40.3% higher in January and up 47.5% in February when compared to 2020 levels. The two-year growth rates are attributed to nearly equal growth in tonnage and yields.

Worth noting, the 2022 yield metrics are being juiced by higher fuel surcharge revenue as diesel prices have soared again to start the year. On-highway diesel prices are up 38% year-over-year on average so far in 2022, reaching $4.10 per gallon in the latest week.

Old Dominion’s yield excluding the impact of fuel prices was 10.7% higher year-over-year for the first two months of the quarter, 610 basis points lower than the all-in growth rate.


The carrier said it continues to take share and will add the capacity needed to continue to do so. Old Dominion plans to open or expand eight to 10 terminals this year.

“Old Dominion’s revenue growth for the first two months of the quarter reflects our ongoing ability to win market share while also improving our yield,” Greg Gantt, president and CEO, stated in a press release. “We expect these favorable trends to continue and, as a result, we remain committed to further expanding the capacity of our people, our fleet, and our service center network to support anticipated growth this year.”

Table: Company reports

High demand throughout the LTL industry has been driven by growing industrial output and rapidly expanding e-commerce fulfillment platforms.

Data published Tuesday showed the Manufacturing Purchasing Managers’ Index increased 100 bps to 58.6% in February. An index reading above 50% indicates growth in the U.S. manufacturing sector, the primary customer for the LTL industry. The dataset has been in expansion territory for 21 straight months.

The accelerating tonnage metrics are also happening in the face of increased pricing and general rate increases, which came in higher and earlier than normal this year.

Saia (NASDAQ: SAIA) benefited from a weak year-ago February comp as well.

Roughly 70 of its facilities were partially or completely knocked offline for multiple days during the 2021 winter storms. The carrier’s tonnage increased 19.1% year-over-year in the recent month, following a 7.6% increase in January. Both shipment counts and weights were higher.

The two-year stacked comps show tonnage growth of 13% and 16.8%, respectively. Saia plans to add 10 to 15 new terminals in 2022. It will also relocate 10 existing terminals into larger spaces during the year.

Saia does not provide revenue metrics in its intraquarter updates.

Other carriers like ArcBest (NASDAQ: ARCB) and Yellow (NASDAQ: YELL) have been using a strong LTL market to rid their networks of lower-margined, less desirable freight. Both companies are expected to provide first-quarter updates in the coming days.

Chart: (SONAR: LCWTF.USA) – Final reporting of LTL rates. Seven-day moving average of daily median rate per 100 pounds. Reported on a 42-day lag. To learn more about FreightWaves SONAR, click here.

Click for more FreightWaves articles by Todd Maiden.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.