Fourth quarter operating income was up 35.5% y-o-y at US trucking giant Schneider, to $42.4m on revenues that fell 2.4% to $1,371.7m. The relatively good quarter helped offset poor full year results, with operating income falling over 44% y-o-y to $165.2m on revenues that fell 3.8% to $5,290m.
Schneider CEO Mark Rourke said, “In the second quarter of 2024 signs of seasonality returned to the freight market and were even more apparent in the fourth quarter.” Focusing on Q4, 2024:
Intermodal reported operating income up over 177% y-o-y to $17.2m on revenues that grew 6.0% to $276.2m
Logistics has a 39.3% y-o-y increase in operating income to $8.5m on revenues that fell 5.3% to $323.9m
The largest segment, Truckload, saw operating income up 5.3% to $198m on revenues that grew 1.7% to $560.1m.
Across the full year, there was a far more mixed picture:
Truckload operating income was down 47.8% y-o-y to $89.1m on revenues up 0.7% to $2,170.7m
Logistics operating income was down 28.8% y-o-y to $32.7m on revenues that fell 8.1% to $1,281.3m
Though the smallest drop, Intermodal also saw double digit falls in operating income compared to 2023 with a drop of 23.2% y-o-y to $54.5m on revenues that fell 0.9% to $1,041.2m
In the earnings call Schneider’s leadership spoke of their exposure to the retail market, and this appears to have had an effect on the seasonality that the company has experienced through the year. This doesn’t detract from the overall large drops in operating income across the board. That said, CFO Darrell Campbell said he is seeing signs of an uptick in demand into 2025: “We anticipate continued improvement in freight market conditions in 2025, leading to revenue and earnings growth with increased margin and asset returns progressing through the year.”
Cowan acquisition
Schneider acquired Baltimore, Maryland based dedicated truckload specialist Cowan Systems for $390m cash in November, adding 1,800 tractors and 7,500 trailers to the Schneider fleet.
This was the sole reason that Truckload was the only segment to see revenues grow over the financial year, with the rest of Schneider’s revenues and earnings in decline. With the Networks sub-segment more exposed to seasonality, the move reduces the company’s exposure to such issues and takes Dedicated to 70% of the segment’s revenues.
Rourke commented, “Bringing Cowan Systems into our family of companies aligns with our long-term vision to provide customer-centric dedicated solutions as the cornerstone of our Truckload segment and broaden our presence to provide greater value to our customers.”
Uncertain times ahead
Rivals CH Robinson had a similar year with overall revenues and income slightly down but Q4 results very good indeed. This suggests a pattern across the industry as a whole. Even so, with an uncertain macroeconomic future in the US, sharp full year falls in revenues and profits for Schneider don’t come at a great moment. A number of large US players have exited the market in the last year, and while the company’s leadership is upbeat about the future, not all observers of the market share that view. In an economic outlook with little in the way of certainty, now isn’t a great time to have sharply declining income.
Author: Richard Shrubb
Source: Ti Insights
Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry.
Visit GSCI subscription to sign up today or contact Michael Clover for a free demonstration: [email protected] | +44 (0) 1666 519907
For your logistics and transportation management needs
Providing high frequency logistics and supply chain data and analysis for all those invested in the industry.