Ongoing strong demand for freight helped Schneider National report second-quarter adjusted earnings per share of 60 cents, 16 cents ahead of analysts’ expectations and 34 cents better than the prior-year result.
Expecting “excess demand” for freight to continue the rest of the year, Schneider (NYSE: SNDR) raised its 2021 earnings-per-share guidance Thursday to $1.85 to $1.95, up from a prior guidance of $1.60 to $1.70.
“Inherent in this updated guidance was the expectation for continued strength in market demand, coupled with constrained driver capacity,” Steve Bruffet, Schneider National’s CFO, said during the company’s quarterly earnings call Thursday. “We expect these conditions throughout the remainder of this year, which also serves as a constructive setup for 2022.”
Mark Rourke, president and CEO of Schneider, said truckload and intermodal business segments delivered “solid sequential margin improvement from the first quarter” despite difficulty in finding truck drivers.
“Our average tractor count growth was 265 units in the quarter on 400 units of sales growth. We are working to get to new startups as well as existing business tractor units fully seated in what remains a highly constrained Class A CDL driver market,” Rourke said during the call.
To help with the shortage in drivers, Schneider has invested in a series of compensation plan increases over the last year, as well as delivering productivity gains across its solo driver fleets, he said.
“We’ve also reopened several of our Schneider CDL training academies to develop our own new drivers,” Rourke said.
Green Bay, Wisconsin-based Schneider currently operates 9,287 tractors (company and owner-operator trucks) and 36,519 trailers.
Revenue, excluding fuel surcharges, in the truckload segment increased 5% year-over-year to $475.2 million. Truckload revenue per truck per week was $3,985, an 8% increase compared to the same period last year.
Revenue in the dedicated truckload segment increased 15% to $198.5 million. Truckload segment operating ratio was 84.5%, compared to 91% last year.
Intermodal revenue, excluding fuel surcharges, increased 25% year-over-year to $274 million as loads increased 15.7% and revenue per load was up 11.8%. The operating ratio was 87.3%, compared to 95% in the second quarter of 2020.
Rourke said the company’s intermodal segment has increased revenue, despite “grappling with excess demand beyond what we can successfully move.”
The intermodal ecosystem, like many areas of the economy, is suffering from extended labor challenges, Rourke said. Schneider’s average unload dwell time for its customers has increased 70% from the 2019 comparable period.
“Labor shortcomings and freight volumes continue to impact intermodal ramp congestion in certain critical parts of the network at times resulting in volume limiting rail allocations,” Rourke said. “We’re not fully seated in company tractor dray fleets in some of our high-volume hubs.”
The logistics division recorded an 87% year-over-year increase in revenue, excluding fuel, at $430.7 million. Operating ratio was 96.1%, compared to 96.4% during the second quarter last year.
“Our logistics segment has been thriving and growing, including contract logistics and port services, with the largest contributor being brokerage,” Rourke said.
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Bob Riley
So why are multiple drivers on Target account in Wilton, NY only getting 3 loads a week. Could it be the incompetence of the 2 young girls running the account? When will Schneider step up and address this problem???