Dive brief:
- Knight-Swift Transportation Holdings’ intermodal segment nearly hit a “breakeven” operating ratio in Q4, the carrier reported on Jan. 21.
- The company reported an adjusted operating ratio of 100.1%, a 140 basis point improvement from 101.5% a year prior. Knight-Swift credited the upswing to a 2.8% increase in revenue per load and structural cost reductions.
- Although revenue per load gains were a bright spot in Q4, the intermodal segment’s revenue for the quarter fell 3.4% year over year to $95.7 million due to a 6% drop in load count.
Dive insight:
As the industry struggles through a prolonged weak freight market, Knight-Swift’s cost-cutting efforts helped the company bring its intermodal business closer to profitability. The carrier said its priority will be cost control until freight demand returns.
“We remain focused on delivering excellent service and driving appropriate returns through cost control, network balance, equipment utilization, and growing our load count with disciplined pricing,” the carrier said in its earnings release.
Brad Stewart, treasurer and SVP of investor relations, said on a call with analysts that despite the drop in load count, revenue for the segment grew 1.7% on a sequential basis. He added that the company was looking ahead to leveraging its rail partnerships in an improving market.
Intermodal growth has been a focus for Knight-Swift. In 2023, the carrier inked a multiyear agreement with Canadian Pacific Kansas City to handle its rail shipments in Mexico.
Knight-Swift’s intermodal business could also benefit if a proposed merger between Union Pacific and Norfolk Southern is approved. The carrier in September issued a statement supporting the combination.
“This unified rail system will let us seamlessly integrate our trucking with rail on cross-country shipments like never before,” Knight-Swift CEO Adam Miller said in the carrier’s endorsement. “The result will be faster deliveries, and lower fuel usage, which is great news for American businesses.”
