Dive Brief:

• Old Dominion Freight Line plans to invest in equipment and staffing in 2021, "as our volume trends continue to accelerate," CFO Adam Satterfield said during an earnings call Thursday.
• An investment of about $605 million in capital expenditures this year would cover new tractors and trailers, technology, and possibly up to six new service centers, President and CEO Greg Gantt said on the call.
• Gantt said hiring now is more difficult than it has been in the past, and he would like for Old Dominion's pace to be quicker. Until the firm hires enough staffers, it will continue to supplement with purchased transportation, Satterfield added.

​Dive Insight:

Spot rates and load-to-truck ratios are still soaring above 2020 levels. Private and for-hire fleets are looking for drivers. Companies, including J.B. Hunt and now Old Dominion, are planning sizable equipment investments.

But LTL-focused Old Dominion said the race to add capacity is going at a slower pace than what it may seem.

"We haven't seen a whole lot of movement, for the most part," Gantt said, in response to a question from an analyst asking if the industry was scrambling to increase capacity. "Every now and again, you'll see some carriers adding a terminal here and there. But ... when we look over a longer period of time, the reality is, there's been more of a decrease in the number of service centers in operation around the country."

Gantt said capacity comprises three areas: door capacity, fleet and equipment, and people.

Old Dominion's service-center strategy is unique. It uses door pressure as a way to gauge other capacity needs. The firm currently has excess door capacity of about 25%, which is a larger percentage of overflow than it would keep in other areas, such as equipment.

"We're not capacity constrained," Gantt said. The carrier has been investing in capacity for the last decade, he said, which is "obviously paying off." Old Dominion has had to limit some TL-type shipments, he said, but the carrier has generally avoided constricting volumes and turning down loads.

Of the company's 2021 capital expenditures, $290 million is planned just for equipment. Gantt also noted Old Dominion is making some purchases to test electric vehicles, "be it switchers; be it trucks ... and/or forklifts," he said.

And, at the beginning of March, the company said it wanted to hire 800 truck drivers over the following three months. So far, the hiring push has led to some lost productivity on the dock, Satterfield said. But that's a typical occurrence in such staffing efforts.

"While we would like to see our platform productivity improved, we believe it is more important for these employees to properly load our trailers to maximize employee safety in line-haul efficiency," as well as learn claims prevention and safety protocols, he said.

J.B. Hunt is also looking for drivers. And, like at Old Dominion, executives noted recruitment is more difficult now than it has been in the past. J.B. Hunt COO Nick Hobbs said on the company's earnings call that there are some 220,000 fewer available drivers, due to the pandemic and the FMCSA Drug and Alcohol Clearinghouse.

"In my opinion, the industry is facing the most challenged driver market that I’ve seen in my 37-year career at J.B. Hunt," Hobbs said.

But J.B. Hunt differs from Old Dominion in its approach to tractor investment.

J.B. Hunt announced recently it was doubling up on trailers and containers, focused on bolstering its intermodal and highway services capacity. But it was forgoing tractor procurement, able to avoid that expenditure thanks to success in providing trailers to power-only truckers.