Talk of tariffs took the legs out from under momentum that was starting to build during bid season early this year, Knight-Swift Transportation Holdings CEO Adam Miller told analysts and investors April 23.
Talking after Phoenix-based Knight-Swift reported first-quarter profits of $30.6 million on total revenues of more than $1.8 billion, Miller said the company’s contract talks with shippers started 2025 as expected, with rates rising in the low- to mid-single digits from 2024. But as President Donald Trump’s tariff plans came into focus, Miller said some customers grew more focused on getting the lowest cost possible while others hit pause on their plans.
“We are expecting a nice seasonal volume rebound in March,” Miller said on a conference call. “However, talks of tariffs and the fluid trade policy spurred a more cautious tone among shippers that brought a pause to the momentum in the market.”
The truckload division of Knight-Swift, No. 3 on the FleetOwner 500 list of for-hire carriers, nearly doubled its operating income in the first quarter compared to a year earlier even though revenues slipped 4% to $1.05 billion. Cost containment and the sale of underused assets contributed to the bottom-line boost, but also notable was the quarterly operating profit turned by U.S. Xpress, the brand’s first since Knight-Swift acquired the business in July 2023.
The comments from Miller and his team about hopeful trends giving way to something closer to paralysis echo those made a day earlier by leaders of Old Dominion Freight Line Inc. There may have been a pull-forward element to what looked like a “reacceleration,” CEO Marty Freeman and CFO Adam Satterfield said, but the less-than-truckload carrier saw early signs of the upturn the sector has long been hoping for.
At Knight-Swift, LTL was a bright spot during the first quarter. The company has been building a near-national network since 2021, and executives said their teams grew further into it early this year. Revenues excluding fuel surcharges climbed 27% to $305 million, with shipments per day rising 24% despite winter storms in the Southeast. For the second quarter, executives expect the group to grow revenues by 25% or more from a year ago, which will help improve its operating ratio to the low 90s from 94.2% in Q1.
“We feel good about the volumes building,” Miller said. “The first quarter just got off to a slower start than we had hoped, and you had some cost headwinds that we’ve been dealing with. But I feel much better about where we ended in March, and I felt that trend continued into April.”
Still, the focus is on tariffs and the uncertainty they have injected into the economy. Miller said the Knight-Swift team expects May to be unseasonably weak because of a drop in imports that’s already visible in supply-chain data. Big questions, he added, are how much of a rebound there might be in June if there’s “some clarity on trade policy” and how well the beverage and produce sectors—big contributors to spring and early-summer volumes—perform.
Because of the cloudy outlook, Knight-Swift’s leaders have stepped back from providing two quarters of guidance on volumes and profits to only forecasting the second quarter. At a headline level, they expect adjusted earnings per share—which were 28 cents in Q1—to be between 30 cents to 38 cents and for truckload revenues to rise slightly and for intermodal work to be “fairly stable sequentially.”
Shares of Knight-Swift (Ticker: KNX) rose nearly 2% to $40.36 April 24. Over the past six months, they are down more than 20%, which has cut the company’s market capitalization to about $6.5 billion.
