Less-than-truckload carrier Old Dominion Freight Line announced Tuesday that volumes and yields grew at an accelerated clip during August.
The Thomasville, North Carolina-based carrier saw revenue increase 29.1% year-over-year during the month, following a 36.7% growth rate in July. Tonnage was up 18.6% year-over-year in July and 10.9% in August.
Through the first two months of the third quarter, revenue per hundredweight, or yield, was up 15.5% year-over-year, 9.9% higher excluding fuel surcharges.
The comps are to a 2020 period during which LTL demand was still shaking off a COVID hangover. Old Dominion’s revenue was down 2.9% year-over-year in July 2020, up 1.3% in the month that followed.
Management said recent volumes were “affected” by an increase in COVID cases as well as other headwinds facing customer supply chains. Old Dominion (NASDAQ: ODFL) implemented an incentive payment to employees to address the resurgence of the virus.
The press release pointed to a strong economy and market share wins as the catalysts for the revenue gains.
“Old Dominion’s revenue and shipment growth for the first two months of the third quarter reflects strength in both the domestic economy and demand for our service,” stated Greg Gantt, president and CEO. “These factors have continued to support our ability to win market share and improve our yields.”
The carrier recently added three new terminals (178 doors) and expanded three other facilities to accommodate the growth. It plans to open a total of nine facilities in the back half of this year or by early 2022. It’s also adding doors at an additional 12 locations.
“We will also continue with our ongoing investments to further expand the capacity of our service center network, our fleet and our people to ensure that we have the capacity to support our expectations for continued growth,” Gantt added.
The August Manufacturing Purchasing Managers’ Index increased 40 basis points to 59.9%. A level higher than 50% indicates growth in the U.S. manufacturing segment, which can account for more than 80% of LTL volumes.
Further, industrial production was up 0.9% sequentially in July and 6.6% higher year-over-year. The index is only 0.2% off of pre-pandemic levels.