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The Daily
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FedEx Freight sees volumes stabilize, expects Q4 margin improvement
FedEx Freight said Thursday that shipment volumes have continued to stabilize and that it expects stronger operating leverage next year as a standalone company, according to Todd Maiden’s reporting. The nation’s largest less-than-truckload carrier, which completed its spinoff from FedEx in June, reported four-month results for June through September as part of a move to calendar-year financial reporting. Revenue rose 9% year over year to $3.28 billion, and revenue per day was up 8%.
The increase came from a 9% rise in revenue per hundredweight, while tonnage was level. Shipments per day fell 1%, offset by a 1% increase in weight per shipment. Yield excluding fuel was up just 0.3%, and revenue per shipment excluding fuel rose 2%. The carrier has repriced about 25% of its contract business since the separation and said net revenue churn has improved. Its local, dedicated LTL sales teams are winning business and driving a better freight mix.
Fourth-quarter guidance calls for revenue of $2.3 billion to $2.37 billion, a 13% increase at the midpoint, with higher diesel fuel surcharges as the primary driver. Adjusted operating income is expected to rise 20% at the midpoint to a range of $185 million to $205 million, which implies a 91.4% to 92% adjusted OR. FedEx Freight expects both volumes and yield excluding fuel to increase in the quarter, and its 2027 general rate increase is expected to average 6.9%, effective Jan. 8. Shares were up 3% in after-hours trading Thursday.
FedEx Freight’s standalone results give a closer look at its LTL operations and at broader market trends. The company said it will soon decide on a dividend and on buying back stock, with repurchases likely used to offset dilution as FedEx unwinds its equity position.
TFI International operating ratio improves to 89.5% as Truckload leads
TFI International’s Truckload segment led its third-quarter results even as the LTL operating ratio worsened, according to John Kingston’s reporting. The company-wide OR improved to 89.5% from 91.2% a year ago. Diluted EPS was $1.28, compared with $1.02 a year earlier, and TFI projects fourth-quarter EPS of $1.30 to $1.40. CEO Alain Bedard called the Truckload quarter “remarkably strong,” citing double-digit top-line growth despite fewer trucks and operating income that nearly doubled.
Truckload operating income was $100.2 million, and the Logistics segment’s $49.4 million also surpassed LTL. LTL shipments rose 4.62%, while average weight per shipment fell 3.58%. The Truckload segment’s truck count was down almost 12%.
Saia posts record third-quarter revenue and tonnage on terminal expansion
Saia reported third-quarter earnings per share of $3.41 Thursday, 11 cents better than the consensus estimate, according to Todd Maiden’s reporting. Revenue of $983 million was 17% higher year over year, and tonnage rose 9% as shipments increased 1% and weight per shipment grew 8%. The LTL carrier logged an 87.6% operating ratio, flat y/y and 70 bps worse than the second quarter, against a normal 150 to 200 bps of degradation. Tonnage is up 10% y/y so far in October, and Saia announced a $250 million share repurchase program.
Since 2022, Saia has opened 45 new terminals and relocated or expanded another 25. Management said its 219-terminal network is finally “on equal footing” with other national carriers, and the focus now turns to improving operating results at the new locations.
Trailer Bridge names Charles Gittens CEO
Trailer Bridge named Charles Gittens its next chief executive officer, effective Nov. 2, according to Stuart Chirls’ reporting. The Jacksonville-based carrier announced the appointment Oct. 26. Gittens succeeds Mitch Luciano, who left the company Oct. 1 after serving as CEO since 2015. Gittens most recently served as president of trade for King Ocean Services and was previously president and chief commercial officer of Seacor Island Lines, where Trailer Bridge credited him with increasing revenue by 115%.
Gittens takes over as Trailer Bridge concentrates on its ocean transportation business following a 2025 agreement to sell its domestic logistics division. Recent initiatives include more than $9 million in improvements to its roll-on/roll-off barges serving the Puerto Rico trade.
XPO beats third-quarter estimates as LTL operating ratio improves to 80.1%
XPO reported third-quarter adjusted earnings per share of $1.70, 13 cents ahead of the consensus estimate and 63 cents higher year over year, according to Todd Maiden’s reporting. Consolidated revenue of $2.37 billion was 12% higher but $10 million below analysts’ expectations. LTL revenue rose 17% to $1.47 billion on a 5% increase in tonnage and a 12% increase in yield. The unit’s 80.1% adjusted OR was 260 bps better y/y, and XPO raised its full-year margin outlook to 250 bps or more of improvement. October tonnage is running 6.5% higher y/y.
XPO shares were down 3.7% in midday trading Thursday as investors worried that recent results were boosted by higher fuel surcharges. LTL stocks are down roughly 20% to 30% since a near-term peak in June.
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| Time | Guest | Topic |
|---|---|---|
| 12pm | Michael Baumgardt | Executive Vice President of Intermodal and Logistics at Schneider |
| 12:20pm | Craig Barth | Chief Financial Officer at Premier Trailer Leasing |
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| Company | Ticker | Modes | Call Date | Time (EDT) |
|---|---|---|---|---|
| TFI International | TFII.TO | LTL, specialty TL, parcel | Oct. 30 | 8:30 AM |
| Canadian National (CN) | CNI | Railroad | Oct. 30 | 8:30 AM |
| Covenant Logistics Group | CVLG | TL, logistics | Oct. 30 | 10:00 AM |
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FedEx Freight’s fourth-quarter guideThe carrier guided to revenue of $2.3 billion to $2.37 billion and adjusted operating income of $185 million to $205 million. Watch whether volumes and yield excluding fuel increase as expected, and for its dividend and buyback decision. |
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LTL stocks under pressureLTL stocks are down roughly 20% to 30% since a near-term peak in June. Watch whether tonnage growth, up 6.5% at XPO and 10% at Saia so far in October, outweighs investor concern over fuel-surcharge-boosted results. |
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TFI’s LTL marginThe company-wide OR improved to 89.5%, but the LTL operating ratio rose. Watch that segment against TFI’s fourth-quarter EPS projection of $1.30 to $1.40. |
