- Schneider National's dedicated business bucked a downward year-over-year revenue trend, notching a 1% increase or $5.3 million boost in Q4. That reversed a string of year-over-year declines in previous quarters for the segment.
- Besides acquisitions helping drive the change, EVP and CFO Darrell Campbell said dedicated truckload revenues saw "solid organic growth."
- Acquisitions could further bolster the segment, Campbell told analysts. “We remain disciplined on custom acquisitions, which would continue to support our growth and earnings expectations,” he said.
The Wisconsin-based carrier has focused on growing its dedicated truckload business since its acquisitions of Midwest Logistics Systems in December 2021, deBoer Transportation in June 2022 and M&M Transport Services last August.
The addition of M&M was expected to raise Schneider’s dedicated contract revenues to $1.5 billion. But its business as a whole is still seeking to regain its footing, given a challenging environment across segments.
While Schneider’s truckload segment reported Q4 revenues of $550.7 million, operating income for the business was reported at $18.8 million, down from $68.9 million a year ago. That was driven by several factors, including lower network pricing, increased insurance claims costs and a net loss on the sale of equipment.
President and CEO Mark Rourke said the company recognizes the weak freight environment’s impact on current growth in its dedicated business. But he added, “dedicated’s consistent revenue and earnings profile places it at the top of Schneider’s strategic growth priorities alongside intermodal.”
For years, the carrier methodically increased the amount of dedicated business it has as part of a long-term strategy.
Campbell said the company’s dedicated truck count represented over 60% of the carrier’s truckload segment total, which was up from 57% a year ago.“This trend reflects progress on our stated commitment to strategically grow this business organically and through opportunistic acquisitions,” he said.
Experts say more mergers and acquisitions are likely in 2024 as carriers seek increased capabilities.