A couple of less-than-truckload carriers provided updates through the first two months of the second quarter on Wednesday. The year-over-year advances were very large and reflected easy comparisons to 2020, which experienced a sharp falloff as parts of the economy were knocked offline amid expanding COVID-related shutdowns.
ArcBest Corp. (NASDAQ: ARCB) reported a 40% year-over-year increase in revenue per day in its asset-based segment, which includes LTL operations, during May. The company previously disclosed that April revenue was up 47% year-over-year. Tonnage per day was up 29% in April and 21% in May with revenue per hundredweight, inclusive of fuel surcharges, up 15% and 16%, respectively.
On a sequential basis, revenue in April increased 6% from March as tonnage increased 5%. Those were the best sequential trends the company has experienced in the past decade. The strength recorded in April continued sequentially into May with revenue up 3% and tonnage up 0.5%.
The filing showed that the increase in yield from April to May “was the best in the past 10 years” and driven by higher prices in its core and transactional offerings, improved mix and higher fuel surcharges.
Table: Company reports
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Saia (NASDAQ: SAIA) also reported large year-over-year increases in shipments and tonnage in April and May.
The Johns Creek, Georgia-based carrier said shipments per day were up 27.8% year-over-year in April and 12.7% in May. Tonnage per day was up 30.5% in April and 22.5% in May.
No sequential trends were provided in Saia’s release. The company doesn’t provide yield metrics in its midquarter update.
Both carriers reported improvement in weight per shipment, which typically drives margins higher.
Industrial activity continues to ramp
A Tuesday report showed the Manufacturing Purchasing Managers’ Index increased 50 basis points from April to 61.2% in May. This was the fourth consecutive month the index held a reading above 60%. An index reading above 50% indicates growth in the U.S. manufacturing sector.
Readings in the subindexes — new orders (67%), production (58.5%) and supplier deliveries (78.8%) — were some of the highlights. Notably, manufacturing inventories (50.8%) entered growth territory, but customers’ inventories (28%) dipped lower and maintained the “too low” designation. The latest inventory reading suggests replenishment is required, which is a tailwind for trucking demand.
The index captures delivery times, which have increased due to a lack of transportation capacity. The increase in delivery delays is pushing the index higher; however, when normalizing the subcomponent, the overall PMI remains in expansion territory.
LTL shipments have a high correlation to the PMI data, typically lagging fluctuations in the index by three months. Industrial-related freight can account for more than 80% of shipments in some LTL networks.
ArcBest also reported that revenue per day in its asset-light segment increased by approximately 90% year-over-year in both April and May. The comps were also reflective of severe declines from COVID lockdowns a year ago. On a sequential basis, revenue was down 3% in April but increased 14% in May.
Shares of ARCB and SAIA were off approximately 3.5% at noon Wednesday compared to the S&P 500, which was up 0.3%.
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