Dive Brief:
- Heartland Express had a $10.9 million net operating loss in Q2, but it still improved sequentially during a prolonged and challenged industry-wide operating environment, CEO Mike Gerdin said in a July 24 press release.
- The recent financial hit compares to an operating loss of $3.5 million in Q2 2024, but it marks a sequential improvement from a Q1 2025 operating loss of $13.9 million.
- “While we have begun to see some encouraging signs within current freight demand and customer pricing, we do not expect material improvements until later in 2025 and a resulting positive impact to future financial results and an improved freight outlook in 2026," Gerdin said.
Dive Insight:
Heartland and other carriers are dealing with an oversupplied market and weak demand.
Ongoing tariff actions and economic uncertainty are leading shippers to adopt a wait-and-see approach, resulting in delayed spending decisions, Andy Dyer, CEO of AFS Logistics, said in a July TD Cowen/AFS Freight Index news release.
Heartland echoed those trade policy remarks. "These dynamics coupled with what we perceive as unsustainable pricing in many markets and rising operating costs, continue to be a significant headwind for us and all of those operating in our industry,” Gerdin said in the carrier’s earnings press release.
Subsequently, the Iowa-headquartered TL carrier’s Q2 operating revenue went down about 23% to $210.4 million, compared to $274.8 million in the same period of 2024. Its operating ratio of 106.4% for Q2 was up from 99.9% a year ago.
That financial pressure has come as the carrier faces challenges with integrating new acquisitions, notably its Contract Freighters, Inc. and Smith Transport deals from 2022. Both brands had failed to operate profitably in Q2 2025, the carrier said.
But to improve margins, the CFI team began a fleet telematics transition during Q2 to improve driver utilization and enhance the driver experience.“This transition is approximately 75% complete and we expect the full transition to be completed during the third quarter of 2025,” per the earnings release.
The carrier expects to have all four of its brands (Heartland Express, CFI, Millis Transfer and Smith Transport) on a common management system by Dec. 31 to drive operating efficiencies in 2026.
Heartland has also reduced underperforming lanes of freight and reduced overall fleet size to align with current demand.
