- Demand tanked at Yellow Corp. last quarter, with LTL tonnage per workday falling 25.1% and LTL shipments dropping by 23% YoY, according to the carrier’s quarterly earnings report.
- The fall in demand, driven by the loss of retail and industrial business, contributed to Yellow posting a $15.5 million net loss in the quarter.
- Other figures suggest demand may have hit its floor, though. The carrier posted a better-than-usual sequential improvement in tonnage from December to January, up 8%, compared with a historical 1% decline.
Fourth-quarter tonnage per day craters at Yellow
The quarterly loss still represented an improvement from the $44.7 million loss the carrier reported in Q4 2021. At the time, the $54.9 million, or $1.08-per-share, hit came from a partial annuitization of non-union pension plans, according to Yellow.
But plummeting demand was the chief culprit last quarter.
Sequential tonnage declines in November and December “were certainly more pronounced than what we would have expected,” Yellow CFO Dan Olivier said during the company’s Q4 earnings call.
But CEO Darren Hawkins told investors he remains bullish on the U.S. and its LTL market. Hundreds of thousands of construction jobs expected to be created by federal infrastructure projects will renew competition with the trucking industry for drivers, resulting in opportunity for national carriers with available capacity, the CEO said.
“The moat around these national LTL carriers, I still see it as strong,” Hawkins said. “In the meantime, with the tonnage that we no longer move through our networks, we’re certainly adjusting our costs to match the tonnage.”
The LTL market — like the trucking industry overall — saw a drop in demand in the second half of 2022. XPO managed to continue improving tonnage in Q4, but the company posted a $94 million loss in Q4 following the spinoff of its brokerage, RXO. Old Dominion Freight Line, meanwhile, is pinning its hopes on a freight rebound in the spring.