Dive Brief:
- Ryder System’s Q4 operating revenue of $2.6 billion remained nearly unchanged compared to a year earlier, according to the company’s Feb. 11 earnings press release.
- Year-over-year revenue declines in the company’s fleet management solutions segment and dedicated transport solutions—1% and 8% respectively—were partially offset by a 3% revenue gain in its supply chain solutions business, per the release.
- CEO Robert Sanchez said in an earnings call that the company’s balanced growth strategy has enabled it to “outperform prior cycles even during this prolonged freight downturn.”
Dive Insight:
Sanchez said the company's adjustments to its business model has reduced its reliance on used vehicle proceeds and steered it away from underperforming geographies and services.
Sanchez said during the call with analysts that Ryder’s focus on growing its more lucrative supply chain and dedicated businesses propelled those segments to represent 62% of the company’s revenues in 2025, compared to 44% in 2018. He said the segments’ operating cash flow of $2.6 billion is up more than 50% from 2018.
Although the company seeks to diversify its revenue mix, fleet management solutions, which includes rentals and used vehicle sales, was the company’s largest segment by total revenue in Q4. That was down 1% from a year ago to $1.47 billion. Quarterly operating revenue in the segment was $1.3 billion, down 1% compared to a year earlier.
CFO Cristina Gallo-Aquino said during the call that declining operating revenue was due to lower rental demand. She added that a $136 million drop in fleet management’s pretax earnings from a year ago reflected weak rental market conditions and used vehicle sales.
However, there are signs that demand for trucks may recover. Sanchez said to analysts that the Institute for Supply Management's latest Purchasing Manager’s Index reflected manufacturing expansion, but noted that Ryder wouldn’t feel any rebound in that sector until later in the year.
President and COO John Diez said Ryder has yet to experience any demand recovery.
“We typically see about a 6-month lag before … market conditions improve, show up in rental,” said Diez, who will take over as CEO following Sanchez’s retirement on March 31.
