“The weak economy and high fuel prices continue to impact Covenant’s financial results,” said David R. Parker, Covenant’s president & CEO. “Our number-one goal is to return the company to the profitability levels we produced in 1998 and 1999.” Parker said the carrier expects difficult operating conditions to continue through the remainder of 2001. However, he added that the key to that goal is returning utilization to approximately 140,000 miles per tractor annually.
“We believe that utilization bottomed out in the first quarter but expect utilization for the second quarter to increase sequentially and year-over-year,” Parker said.
Parker added that Covenant is experiencing rate pressure, with freight rates expected to be down $0.02 to $0.03 per mile in the second quarter as a result of new business and growth in its dedicated division. An increase in diesel fuel prices of over $0.13 per gallon since the end of March also has impacted Covenant's earnings significantly, he said.