Old Dominion Freight Lines, a Less-Than-Truckload Carrier, has not only had a great fourth quarter, but essentially broke records. They have had an operating ratio towards the final three months of 2020. This is with solid increases happening towards the revenue as well.
Certainly, this is distinguishable as a key benchmark for LTL carriers, as their revenue per hundredweight, known as yield, would rise at a steady pace also.
Old Dominion has had an operating ratio of about 76.3%.
Which one might see as a significant improvement from the original 81.3%.
Chief Financial Officer Adam Satterfield has mentioned that LTL tons per day had risen about 11.9% in January, year-over-year.
The operating ratio’s results went on to show Old Dominion still can learn new tricks. Satterfield had this to say: “Our customers are getting healthier, business trends are improving, and you are seeing the advantage of our business model coming through for us. We are in a good spot right now and look forward to this playing out in 2021.”
This is all thanks to strong freight demand, as well as an improving economy making for a favorable pricing environment. One key component for the carrier’s strategy has been to up the density of the service network.
Satterfield believes that “building out our service network will pay off for us this year with the volume increases we expect now and in 2022.” This is certainly optimism we haven’t seen before in the trucking industry.
As a result, the company has been able to end their fourth quarter with nearly $401 million in cash. This is down from the third quarter only slightly. Old Dominion happens to be one of the largest for-hire carriers in all of North America.
They’re able to find success with increasing their workforce size. Which is truly a plus for a company that only expects to pay $40 million for information technology, among other assets.