GREEN BAY, Wis. – Intermodal net income was down 30% in the third quarter of 2019 for major intermodal, trucking, and logistics company Schneider National.
The drop was due to reduced volumes and increased rail costs, officials say.
Revenue was off by 2% and Schneider’s intermodal operating ratio increased to 89.9, up from 85.8 for the quarter.
However, in a recent earnings call, CEO Mark Rourke expressed optimism about rates railroads are charging for intermodal.
“Our rail purchase transportation costs do reflect, over time, the market, both up and down for both participants,” he says. “So we would expect we are perhaps at the high end, at the peak side of that presently, and that as market rates have rationalized a bit over the last couple of quarters that we would start to see some relief on that end of the income statement.”
Steve Bruffett, chief financial officer, says that if rail pricing doesn’t drop, Schnieder can maintain its intermodal margins by “process and efficiency improvement objectives that we’re going to go after in 2020.”
In September, Bruffett reported intermodal margins at 10% to 12%, down from 12% to 13% in 2018.
Like other intermodal companies, Schneider has been battling truck rates approaching or going below intermodal rates, undercutting truck/rail cost advantages.
Rourke, however, is optimistic that lost traffic will return to intermodal due to tightening truck capacity.
Schneider intermodal revenues for the third quarter were $249.2 million, down from $254.4 million from the third quarter of 2018, while net income was $25.1 million, down from $36.1 million.
