Market Overview

Old Dominion Sees Tonnage Accelerate From August Inflection

Old Dominion Sees Tonnage Accelerate From August Inflection

Improvement in less-than-truckload fundamentals was reported for a second day in a row on Thursday. Old Dominion Freight Line's (NASDAQ: ODFL) November update showed the carrier increased revenue per day by more than 6% for the month.

The report follows a Wednesday update from SAIA (NASDAQ: SAIA) in which the carrier reported tonnage increases for the first two months of the fourth quarter of 5.7% and 7.3%, respectively.

Old Dominion reported a 5.2% year-over-year increase in November tonnage with weight per shipment and total shipments increasing equally. The tonnage increase was mostly responsible for a 6.3% climb in revenue per day, with revenue per hundredweight, or yield, only advancing modestly.

Through the first two months of the fourth quarter, the carrier reported that yield is up 0.5% year-over-year, 3.8% higher excluding fuel surcharges.

"Old Dominion's revenue results for November include increases in both our volumes and yield. The increase in tonnage reflects the additional demand for our industry-leading service as well as further improvement in the domestic economy," stated President and CEO Greg Gantt in the press release.

The company previously provided October results in its third-quarter filing. Revenue for the month was up 2.6% year-over-year, the combination of a 2.2% increase in tonnage and a 0.3% increase in yield. Yield was up 3.5% excluding fuel.

The manufacturing segment can represent more than 80% of total tonnage for some LTL carriers and the data points are representative of a recovering industrial economy. The Purchasing Managers' Index remained in expansion territory for the sixth consecutive month in November at 57.5% and industrial production increased 1.1% during October.

"Although there continues to be risk to the economy associated with the pandemic, we are increasing the capacity of our team to prepare for anticipated growth," Gantt concluded.

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