Old Dominion Coasts Through Q1

Key Observations

• Revenue was down 5.8% while income slipped 12.5%. The big culprit of poorer margins was increased costs. Operating ratio deteriorated almost two percentage points.
• Revenue per shipment was up both with and without fuel surcharges. Without fuel (a good gauge of freight rate movement), the increase was 2.7%. With fuel, it was a more modest 0.7%.
• Total tonnage and mileage were both down. Total tons slipped 7.8% while total intercity miles were down 7.4%, a reflection of a poor start to the year and weather-related impacts to freight movement.
• Higher labor costs were the biggest contributor to operating margin erosion. Even with a headcount reduction of 4.7%, the labor cost to revenue ratio was up over two percentage points from 2024.
• With the uncertainty around freight volume for the remainder of 2025, the company is reducing planned capex. It was originally planning to spend $575 million on real estate and equipment. That has been trimmed to $450 million - $210 million on real estate, $190 million on rolling stock, and $50 million on information technology.