Dive Brief:
- Ryder System is seeing more opportunities surface for its dedicated transportation solutions segment as capacity continues to exit the market, executives shared during the company’s Q2 earnings call held July 23.
- Operating revenue for the segment fell 3% year over year in Q2, but Ryder expects its fleet count to turn positive in Q4 or early 2027 as sales activity strengthens.
- “Our pipelines are at record levels for us right now,” CEO John Diez said during the call. “We’ve seen a number of opportunities come back where customers have been running their transportation with for-hire carriers, and they’re looking for dedicated capacity and coming back to us.”
Dive Insight:
Ryder’s dedicated transportation solutions business — which provides customers with dedicated fleets, drivers and transportation services under longer-term contracts — is seeing demand improve although the recovery has yet to translate into fleet growth.
The company is seeing signs of a tightening labor market, including driver turnover and more time needed to recruit drivers. Those pressures are particularly relevant to Ryder’s specialized dedicated business, which accounts for about 70% of the segment’s revenue.
Customers are facing rising operations and insurance costs, as well as tighter driver availability, Diez said, which also drives outsourcing to dedicated. He added that Environmental Protection Agency and tariff regulations could result in OEMs passing on more expenses to carriers as well.
“We’ll probably have more clarity in Q3,” Diez said, noting that should help dedicated activity.
Ryder said it remains on track to deliver $70 million in strategic benefits this year, with lease pricing improvements and maintenance cost-saving initiatives in fleet management expected to drive much of the gain. Executives also credited the company’s dedicated operating structure and omnichannel supply chain network for supporting stronger margins.
