Forward Air’s freight volumes continue to rise in the fourth quarter, with tonnage up 5.5% so far in October-November. The expedited transportation and logistics provider also reported increases in weight per shipment and revenue per shipment. The positive metrics show Forward Air’s strategic focus on high-quality freight and pricing power is taking hold.
Tonnage Takes Flight as Network Optimization Bears Fruit
Forward Air announced robust tonnage growth Wednesday in a fourth-quarter update. The company’s expedited segment, including less-than-truckload (LTL) operations, handled 5.5% more tons per day in October-November versus the same period last year. This continues an upward trajectory after tonnage turned positive in September following declines earlier in 2022.
The tonnage increase also shows progress in overcoming a weak comparison period, as tonnage dropped 11.9% year-over-year in the fourth quarter of 2021. CEO Tom Schmitt says the gains reflect efforts to grow LTL freight volumes and focus on securing more preferred, high-quality customers.
“We continue to optimize our network and tailor our best-in-class expedited services to customers with time-sensitive freight needs,” Schmitt explained. “The tonnage and weight per shipment increases prove we are winning loyal customers who ship heavy freight.”
Pricing Initiatives Drive Margin Expansion
Alongside higher volumes, Forward Air is seeing positive momentum in pricing. Weight per shipment popped 11% higher in October-November, indicating Forward Air is successfully targeting a more premium freight mix. Simultaneously, revenue per shipment climbed 2.6% amid inflationary pressures.
The pricing gains showcase Forward Air’s strategy coalescing at an opportune time. “We are making sure we are getting paid more per shipment,” said Schmitt. “This all reflects our Grow Forward strategy of focusing our best-in-class service on high value freight, operating in a cleansed network, and pricing appropriately.”
In fact, excluding fuel surcharges, revenue per ton mile expanded 1.8% year-over-year so far this quarter. As higher-margin shipments compound, these volume and pricing dynamics position Forward Air well for a strong Q4 financial performance.
Unclear Merger Situation Clouds Stock Outlook
Meanwhile, Forward Air remains embroiled in an increasingly contentious legal dispute regarding its proposed merger with freight forwarder Omni Logistics. Forward Air alleges Omni misrepresented financial projections and couldn’t satisfy closing conditions as per the original merger agreement.
The unclear path to completing the deal, along with ballooning legal fees, has weighed heavily on Forward Air’s stock. Shares have plunged over 40% since the merger announcement in August. But if strong operating metrics persist, it could reinvigorate investor optimism after an exceptionally turbulent period.
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