Dive Brief:
- Forward Air’s operating income fell nearly 34% year over year to $15 million in Q3, a company earnings release said Wednesday.
- An “Other Operations” business area captured a loss of nearly $18.3 million, a dramatic dip from Q3 2024’s loss of nearly $1.8 million in the category. That business area excludes the company’s three segments of expedited freight, Omni Logistics and intermodal.
- “Optimizing our cost structure to operate more efficiently remains a top priority, and in the third quarter we implemented additional cost reduction initiatives that primarily included rightsizing our business in alignment with current freight demand and our ongoing transformation strategy,” CEO Shawn Stewart said in the release.
Dive Insight:
Gains in pricing and shifting owner-operators from less-than-truckload to truckload helped deliver stability in earnings, executives said.
Consolidated EBITDA — a non-GAAP measure — was $78 million for Q3, and those earnings for the last 12 months were $299 million, according to the release.
Additionally, cost-reduction initiatives are equating to approximately $12 million in savings on an annualized business, CFO Jamie Pierson said on an earnings call Wednesday.
Forward Air acquired Omni Logistics in January 2024 following a tumultuous process that included Omni suing the company. Executives said Wednesday they’re continuing to consider strategic alternatives such as a potential sale, merger or other transactions for long-term value of the company.
As part of the transformation process between the businesses, the company is unifying operations, except for sales channels, Stewart said. Forward Air is also moving from three enterprise resource planning software systems into one.
Amid the prolonged freight recession, M&A has given transportation service providers the potential to find further efficiencies and savings as they wrestle with rising operational costs and lackluster demand. Like Forward Air, DSV is seeking to offload its USA Truck business, and Landstar is considering a sale of its Mexico-based Landstar Metro business.
“We are working towards a late 2025 or early 2026 sale of Landstar Metro and have thus far experienced a good deal of interest in that company,” Landstar President and CEO Frank Lonegro said on an Oct. 28 earnings call.
