Dive Brief:
- Knight-Swift Transportation Holdings’ Q4 operating income more than quadrupled year over year to about $78 million, buoyed by a 16% improvement in its biggest segment, truckload, the company reported Wednesday.
- The carrier saw signs of an improving market and better business performance as the carrier reduced an intermodal loss and fallout from the exit of its third-party insurance business, executives said on an earnings call Wednesday. A miscellaneous segment had a nearly $16 million loss in Q4.
- "While current freight market conditions have been choppy, we are encouraged by customer sentiment, seasonal spot rate progression, the continued erosion of capacity, and early bid season activity — all of which point to a more balanced market than we have seen in roughly three years,” CEO Adam Miller said in a statement.
Dive Insight:
Knight-Swift’s LTL segment saw operating income fall year over year as the hustled to integrate its acquisition of LTL carrier Dependable Highway Express.
The high integration costs following the July 2024 purchase were due to the quick turnaround that Knight-Swift made in an effort to avoid volume and service disruption with the transition, Miller said.
“It took roughly 11 months to do a similar transition following the MME acquisition in 2021, and we wanted to complete the integration much faster in this case due to the strategic importance of adding the Southwest and particularly California to our network coverage,” he said.
That meant the LTL segment’s operating income was nearly $25 million in Q3 and $9 million in Q4, the company reported. In contrast, the booming Q4 in 2023 for Knight-Swift’s LTL segment generated nearly $30 million.
Across the industry, elevated LTL pricing is easing as fuel surcharge discipline appear to be waning. While demand levels have faded somewhat in recent months, pricing trends held strong in Q4 for Knight-Swift, Treasurer and SVP of Investor Relations Brad Stewart told investors.
Knight-Swift doesn’t expand major DHE integration costs to linger beyond Q4, Miller said.
For its LTL network as a whole during the year, Knight-Swift added nearly 1,430 doors, representing over 30% growth, the company noted. “We believe this meaningfully impacts the reach of our service offering and ultimately will increase the density of our network,” the company said in an earnings release.
“While we currently anticipate that our pace of facility additions will slow in 2025, we continue to look for both organic and inorganic opportunities to geographically expand our footprint within the LTL market,” the company added.
