Dive Brief:
- Schneider National's truckload segment saw a 6% year-over-year revenue drop to $535.3 million in Q3, the company reported Thursday, blaming the challenging freight market and unfavorable pricing.
- The Q3 truckload segment decline was partially offset by organic growth and through revenues from M&M Transport, which it acquired in August, the company said.
- “We have a line of sight to a series of new business start-ups in the fourth quarter of 2023 and the first quarter of 2024, giving us confidence that our momentum in dedicated will continue,” President and CEO Mark Rourke told analysts.
Dive Insight:
Schneider has turned to acquisition to grow its dedicated segment. In addition to M&M, it announced its purchase of Ohio-based Midwest Logistics Systems in January 2022 and six months later bought deBoer Transportation.
The company has seen benefits from the acquisitions, said EVP and CFO Stephen Bruffett, who is retiring in December.
“The growth in our dedicated business, both organically and through acquisitions is supporting earnings in our truckload segment,” Bruffett said. Dedicated services has grown from representing 33% of its truckload segment in 2017 to 57% in 2022.
The company expects weak freight conditions to continue through the reminder of the year, though Bruffett is hopeful the freight market will improve early next year.
Rourke said the company has momentum to continue growing its dedicated business because of its acquisitions, specifically M&M and Midwest Logistics Systems.
“The acquisition synergies and the performance are running ahead of our expectations, and it really is just a great credit to the driver shop and operations team(s) at both of those companies,” he said.
