Old Dominion Freight Line improved profits in Q2 despite year-over-year drops in tonnage, volume and intercity miles.
The carrier’s Q2 operating income increased by 30% to $465.3 million compared to a year ago, and its operating ratio improved to 70.1% for the quarter, versus 74.6% YoY, per a news release.
“The domestic economic environment remains relatively stable, and we are encouraged by the continued improvement in demand that began late last year,” President and CEO Kevin “Marty” Freeman said on an earnings call Wednesday.
Although the domestic economy is not red hot, it’s still positive, and it feels like an inflection point in the market is coming, CFO Adam Satterfield said on the call.
Year over year, LTL tons dropped by 4.1%, shipments fell by 5.7% and intercity miles declined by 4.8%, per the release.
In addition to key metrics such as 99% on-time service and 0.1% claims ratio, the carrier made 1,000 lane adjustments this year to improve standard transit times, Freeman said.
Freeman also said that customer feedback suggests Old Dominion’s customer service, a cornerstone of its strategic plan, helps strongly distinguish the carrier from its competitors.
The carrier is continuing to take a long-term look at the industry, planning to increase its capital expenditure plan by more than $115 million from its initial projections earlier this year.
The increase, $60 million for tractors and trailers as well as $55 million for real estate and service center projects, will put its CapEx at approximately $380 million for this year.
“We got a big runway of growth ahead for us, and we're eager to get back to it,” Satterfield said. “We've built up a tremendous amount of capacity over the last few years.”
