Dive Brief:
- Forward Air continued to reduce its headcount, cutting over 200 full-time employees over the past three months, the company said Tuesday. That excludes changes to its workforce from acquisitions.
- The LTL carrier's cost-reduction measures initially reduced over 100 workers, the company reported in its Q4 earnings in February. Savings also came through other measures, such as a hiring freeze and travel restrictions.
- “The current slowdown in business volumes has created a challenging environment for the achievement of all our initiatives,” CEO, Chairman and President Tom Schmitt said in a statement. “We are, however, encouraged based on our current sales pipeline that volumes will increase in the second half of 2023.”
Dive Insight:
The incremental cuts appeared to involve at least 4.8% of Forward Air’s full-time workforce. The company reported having 4,155 full-time employees at the end of Dec. 31, according to an annual report.
The update to workforce reductions came after the LTL carrier reported recent difficulties with a 6.7% decrease in shipments per day in Q1, according to its mid-quarter Q1 update. The challenges follow an overall decline last year in average weekly volume, dropping from 55.4 million in 2021 to 54.8 million in 2022.
Setbacks were pronounced at the end of 2022 for Forward Air when shipment sizes and weight per shipment fell faster than expected. The company said those issues will likely "impact the first half of 2023 until inventory levels normalize.”
But it’s also seeing positive indicators.
“Despite contending with these challenges that we believe are short-term in nature, we are growing new customers in our targeted areas,” the company said in its Q4 earnings release.
At the same time, revenue per hundredweight increased 2.6% YoY, the company said for its Q1 mid-quarter update this week. And operating revenue improved from nearly $1.7 billion in 2021 to nearly $2 billion in 2022.
Other carriers have also reported layoffs and muted peak season earnings. C.H. Robinson announced approximately 650 cuts in November, adding in February that further reductions are likely this year. Last month, Coyote Logistics confirmed it was laying off 6.8% of workers.
U.S. Xpress also unveiled a cost-cutting plan last year, seeking to initially save $25 million per year.
“2022 was a year of transition for U.S. Xpress, as we ... transitioned our OTR operations back to a more traditional model ... and recently transitioned all Truckload and Brokerage operations under one leader,” CEO and President Eric Fuller said for the carrier’s Q4 earnings call. “We began to see cost savings in the fourth quarter.”
