The US trucking market may be tough but Ryder System has continued to grow its business at a respectable rate in 2024. The full year results issued last week on the 12th February saw revenue up 5% year-on-year, with underlying revenue 7% higher. Earnings before taxes increased by US$11m over the year to US$181m. Revenue numbers were flattered by acquisitions but these depressed earnings somewhat.
At the now less dominant ‘Fleet Management Solutions’ business, revenue was flat over the year at $1,485m, slightly depressed by higher fuel costs. In fourth quarter ‘Earnings Before Tax’ headed higher by 13% as demand for leased vehicles increased.
The ‘Supply Chain Solutions’ contract logistics business revenue for the full year was up 3% year-on-year, with fourth quarter profits show considerable strength, apparently from strong retail demand. However, a major reason for growth in revenue and, to a lesser extent, profits has been the effects of acquisition.
‘Dedicated Transportation Solutions’, which provides customer dedicated truck fleets, also saw acquisition driven growth. Operating revenue for the year was up 39% year-on-year, whilst the fourth quarter saw Earnings Before Tax up 10% year-on-year. Profit margins weakened though, reflecting the nature of the growth.
Bearing in-mind the difficult state of the US road freight market, Ryder has done reasonably well in 2024. This is probably a reflection of the effectiveness of Ryder’s new corporate strategy. By reducing the dependency on the Fleet Management Solutions business, which has proven to have weaker margins, it has increased the importance of Supply Chain Solutions and Dedicated Transport Solutions. The effect of this is to both hardened margins and distance itself from the more commodity end of the road freight market. Supply Chain Solutions and Dedicated Transport Solutions now account for 61% of the revenue of the entire business. This is a considerable change from the structure of five or six years ago. Essentially Ruder Systems has edged towards more of a ‘contract’ relationship with its customers.
Author: Thomas Cullen
Source: Ti Insight
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