🎣 Landstar & Others Struggle

Today’s feature story dives into recent Q3 earnings from Heartland Express, Landstar, and Werner. Plus, Overhaul’s data shows California leading in cargo thefts, while U.S. ports report rising imports but slowing exports as holiday prep ramps up—and more.

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🐔 WHAT’S COOKIN’ IN FREIGHT

🔒 September 2024 Cargo Theft Highlights. Overhaul’s September data shows California as the top hotspot for cargo theft, with 53% of incidents. Electronics were the most targeted product, and thefts were highest from Tuesday to Thursday, primarily involving full truckloads (30%) and last-mile couriers (28%). Key hotspots included Southern California, Chicago, Philadelphia, and Kansas City. Many incidents occurred at unattended warehouses, distribution centers, or delivery points. Violent thefts involving armed criminals against truck drivers were notably high in North Carolina and Maryland. With the holiday season approaching, these trends may continue.

📉 US Ports Show Mixed Trends in Import & Export Volumes. Recent data from US ports reveals a mix of rising imports and falling exports. At the Port of Long Beach, imports grew 2% over last year and 17% since 2019, while exports dropped 13% YoY and 28% from 2019 levels. Other West Coast ports, like Los Angeles and Oakland, also saw import growth as retailers prepare for the holiday season, with agricultural exports boosting volumes in Oakland. On the East Coast, ports like Savannah and Everglades reported some increases, though others saw declines due to high inventories.

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Freight Market Struggles: Q3 Earnings Recap

Last Friday, we shared insights into Q3 earnings from some of the largest logistics players in the U.S. Today, we’re continuing the financial recap with new updates on Heartland Express, Landstar, and Werner.

🎣 Trucking Reports

Plus, UPS prepares for softer holiday season, truck driver arrested in Tennessee for slashing another truck driver’s neck, and more.

FreightCaviarAdriana Pulley

Heartland Express: Losses Continue to Mount

Heartland Express reported a $9.3 million net loss for Q3, marking its fifth consecutive quarter in the red. The company is grappling with low demand and rising operating expenses.

• Adjusted Operating Ratio (OR): Reached 102.6%, which reflects increased costs over revenue.
• Key Drivers of Losses:
  • Aging equipment led to a bump in maintenance costs.
  • Higher salaries and insurance expenses added pressure.
  • Weak performance from two 2022 acquisitions, Smith Transport and Contract Freighters.

CEO Mike Gerdin said:

“We’ll need a meaningful turnaround in the freight environment… to improve asset utilization and lower our consolidated operating ratio.”

Landstar: Muted Peak Season and Lower Guidance for Q4

Landstar expressed a conservative outlook on Q4, citing a “muted peak season” as one reason for the lower guidance.

• Q3 Revenue: Fell 5.9% year-over-year to $1.21 billion.
• Expected Q4 EPS: $1.25 to $1.45, below the market consensus of $1.57.
• Challenges Facing Landstar:
  • Declining truckload volumes and lower diesel prices impacting rates.
  • Revenue per load down slightly, with ongoing capacity attrition among owner-operators.

Joe Beacom, Landstar’s chief safety and operations officer, noted:

“You don’t see people willing to make the investment [in a truck]” until rates improve, highlighting the uncertainty for the coming months.

Werner Enterprises: Optimism for 2025, But Caution for Now

While Werner Enterprises missed some earnings expectations, CEO Derek Leathers provided a cautiously optimistic outlook, particularly for potential rate hikes in 2025.

• Q3 Revenue: Decreased to $745.7 million, falling short of estimates.
• Operating Improvements:
  • Revenue per truck and total miles per truck increased sequentially.
  • Focus on cost control and efficiency with continued investment in driver training.

Leathers shared:

“It is our expectation… that the time for rates to be going up is upon us,” though he added, “the next several weeks will really shape and tell us a lot about what to expect going into the formal bid season.”

Industry Takeaway: Challenges Ahead, Potential Recovery in Sight

The overall message from these companies is clear: 2024 has been tough, but 2025 may hold some promise. Cost control and strategic planning remain essential as companies weather current market conditions and prepare for an uncertain peak season.

• Key Points Across the Industry:
  • Weak demand and low rates continue to drive losses and conservative guidance.
  • Rising expenses (salaries, maintenance, and insurance) are cutting into profitability.
  • Recovery Depends on Market Turnaround: As Heartland’s Gerdin mentioned, a “meaningful” shift in demand will be needed for companies to improve margins.

The upcoming months will likely give a clearer picture of where the industry is heading, with most leaders looking ahead to 2025 for more substantial improvements.

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🌎 AROUND THE FREIGHT WEB

🗳️ Kamala or Donald? We recently posted a poll on X, where 83% of 230 respondents favored Donald. Our Instagram story poll saw similar results, with 1,000 votes showing the same preference.

🌯 Chipotle’s Top Logistics Partner. Arrive Logistics scores Chipotle’s Inbound Logistics Supplier of the Year award for the second year in a row.

🚛 ATA Disputes Report on Driver Shortage Claims. A new FMCSA-commissioned report questions the trucking industry's long-standing driver shortage claims, suggesting high turnover and industry structure may be bigger factors.

🚔 Trucking Ponzi Scheme Uncovered. New Jersey trucking company owner charged in a $5 million Ponzi scheme, defrauding investors with promises of high returns.

⚓️ Election Results Could Shape Port Labor Talks. With a January deadline looming, upcoming U.S. port labor talks may hinge on the presidential election, as employers and unions await potential shifts in government support for their positions.

🎣 THE FREIGHT CAVIAR CORNER

• Conferences: F3 Future of Freight Festival, November 19-21 in Chattanooga. Get $1395 off with our special link!
• Freight Jobs: Find the latest freight job listings here.
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• Upcoming Webinar: 7 Reasons why you should not buy AI software for your brokerage. Click here to RSVP.

FREIGHT MEME OF THE DAY