Dive Brief:
- Ryder System’s operating revenue increased 1% to $2.6 billion due to contractual revenue growth in its Supply Chain Solutions and Fleet Management Solutions segments, CFO Cristina Gallo-Aquino said during a Q3 earnings call.
- Still, the increase was offset by a muted rental environment, in which demand increased sequentially but fell below historical trends, Gallo-Aquino said.
- Due to the weaker freight market, rental capital expenditures fell to $271 million in Q3 compared to $401 million in Q3 2024, per Ryder’s Q3 earnings presentation.
Dive Insight:
Ryder’s rental fleet is expected to be down by the end of the year. Its rental fleet remains below peak levels as it manages through an extended market downturn, COO John Diez said on the earnings call.
The company’s rental results reflect weaker market conditions with commercial rental revenue at $242 million in Q3 versus $251 million the prior year, a 4% YoY drop, per the earnings presentation. “By the end of this year, our ending rental fleet is expected to be down 12% and our average rental fleet is expected to be down 5%,” Diez said during the call.
Carriers and logistics providers’ earnings continue to be impacted by the current freight market — which has been in an “unusually long downward freight cycle,” AFS Logistics CEO Andy Dyer said in a press release.
Ongoing tariff actions creating uncertainty, along with low rates and demand, are some of the challenges the freight market is facing.
Due to the current market conditions, Ryder is also seeing delayed decisions from its lease and dedicated customers and prospects, CEO Robert Sanchez said. The news marks a shift from its previous earnings call in August, when the company saw an uptick in decision-making from its supply chain customers.
Ryder, like many other transport companies, is waiting for a market upturn. At that point, it expects earnings results to improve.
“You should expect once the freight market recovers, we are going to be spending more capital to not only replenish the fleet but grow the fleet both for lease and rental,” Diez said.
