ODFL posts strong fourth quarter update

Thomasville, N.C.-based national less-than-truckload (LTL) carrier Old Dominion Freight Line (ODFL) provided guidance for key operating metrics for the fourth quarter this week.

ODFL reported that revenue per day increased 29.9% annually, driven by an 11.5% gain in daily LTL tonnage, as well as LTL revenue per hundredweight heading up. The company said that the change in LTL tons per day was due to a 15.2% increase in LTL shipments per day that was partially offset by a 3.2% decrease in LTL weight per shipment.

And on a quarter-to-date period, LTL revenue per hundredweight and LTL revenue per hundredweight, excluding surcharges, headed up 16.6% and 9.4%, respectively, annually.

“Our revenue growth through November reflects our continued ability to win market share and the ongoing strength in the domestic economy,” said Greg C. Gantt, President and Chief Executive Officer of Old Dominion, in a statement. “We believe the sequential change in revenue per day for the fourth quarter of 2021 will once again exceed our 10-year average for this metric. We also expect that strong customer demand will continue into next year, as shippers continue to value our superior service and available network capacity at a time when the industry’s capacity is generally limited. While we have capacity to support additional volume growth, we remain committed to further investment in our business to support our expectations for increased market share in 2022 and beyond. We are confident that the continued execution of our long-term strategic plan can produce long-term gains in market share and shareholder value.”

ODFL third quarter 2021 revenue was up 32.3%, to around $1.4 billion, a new company record. The company said, at the time, that this gain was reflects the strength of the domestic economy and unprecedented demand for its best-in-class service.

ODFL Senior Vice President of Operations Dave Bates told LM in a recent interview that because there is so much demand for carrier services, rates are as strong as they have ever been for carriers.

“At ODFL, we have always felt like we have offered the best value for the price of freight in the industry,” he said. “We know we charge a premium price, but we also know we charge that because we offer a premium service. Our rates have been strong. When the industry loosens up, customers become a little bit thrifty in what they want to pay with freight charges…maybe they give up a little bit of service to save a little bit on freight costs. We would lose business sometimes because customers want to save money on freight, but we are not seeing that right now. We are having customers come to us and say ‘in this tight capacity, ODFL, you are still offering the best service and are still giving us claims-free service, making our pickups timely, and we will pay what we have to pay to use your services.’”