"We are very pleased with the progress that our company is making towards achieving our goal of returning our profitability to the levels that we exhibited during the mid-to-late 1990's," said Covenant CEO David R. Parker. "Staying focused on our objectives of constraining capacity growth and improving freight rates and lane density are starting to produce results."
Chattanooga, TN-based Covenant needs that good financial news, too. The carrier had $1.2 million worth of first-quarter earnings wiped out as it took a $900,000 charge to eliminate certain debts and a $2-million charge to cover the declining residual values of its tractor fleet. In the first quarter, freight revenue also decreased 2% to $129 million.
Parker also noted how rising insurance costs are crippling the health of trucking companies, including his own. He said Covenant's insurance and claims expense was up 200 basis points as a percentage of revenue versus a year ago.