Knight-Swift Ekes Out Revenue and Income Gains

Key Observations

• Total revenue increased just 0.1%. Without fuel surcharges, the increase was a more pronounced 1.23%. This was directly connected to a 1.3% increase in the average freight revenue per mile.
  Operating income more than tripled. Lower fuel costs had a lot to do with that. The company also reduced its tractor count by 6% and its trailer count by just over 5%.
• Company wide, operating ratio improved from 98.7 to 95.9. Best divisional performer was truckload which moved from 97.9 to 95.7. LTL took the hardest hit, going from 91.6 to 95.8. Intermodal was still not profitable but took a big move in the right direction to 102.0.
• Labor costs rose the most on the expense side. Salaries and wages were up 4.2% and increased to 39.6% of revenue. That was with 6% fewer trucks on the road.
• Insurance costs were down significantly. While most other fleets saw as much as 15% YoY increases in premium and claims costs, Knight-Swift had a drop of over 24.7%. But that adjustment was necessary to correct excessive insurance costs in previous years. Even with the large drop, Knight-Swifts insurance cost to revenue ratio is over 5% - on the high side of the current average ratio for its peers.