Low yields combined with high labor and one-way purchased transportation costs pushed Waco, TX-based LTL Central Freight Lines into the red both for the second quarter and the first half of 2004.
Although operating revenue increased over $5 million to $105.5 million for the second quarter – with revenue per working day increasing 3.7% and total tons hauled per working day rising 2.2% -- the carrier still lost $2.5 million. The company cited tax liabilities reinstated by the IRS.
For the first half of 2004, Central’s operating revenue rose 1.8% to $202.6 million, but lost $3.7 million over all compared to profits of $1.1 million over the same period in 2003.
Central’s president & CEO Bob Fasso, who was granted a contract extension by the carrier’s board in July despite the carrier’s fiscal troubles, blamed falling yields and rising costs for the losses.
“Yields, labor and purchased transportation were significant contributors to the second quarter loss,” he said. “LTL revenue per hundredweight, excluding fuel surcharges, remained essentially constant compared with the second quarter of 2003, while our average length of haul increased by approximately 11%. LTL revenue per hundredweight, excluding fuel surcharge, declined over 3% from the first quarter of 2004 despite an increase in average length of haul of approximately 3%.”
He also noted that productivity -- measured by bills handled per hour -- declined approximately 4% in the second quarter compared to the same period in 2003.
“In addition, our current freight imbalance is continuing to cause a high usage of expensive one-way purchased transportation to balance freight lanes,” Fasso added. “[But] we believe we … are taking the actions necessary to reverse these negative trends.”