Michael Ward

OK, I apologize. I have been tardy in releasing my quarterly LTL carrier analyses. Very tardy, actually. But now that results for all of the publicly-traded carriers are in the books, let’s roll. To make up for my tardiness, I will post at least 1 update per day so we can wrap things up by end of the week. First up is Knight Swift LTL, aka KNX LTL, aka AAA Cooper / Midwest Motor Express / Dependable Highway Express. They posted results back on Jul 23. If you recall, KNX LTL has been in serious growth mode via multiple LTL carrier purchases and terminal expansions. They are taking market share, but have been challenged by expansion costs and the ongoing LTL freight downturn. Let’s see how they fared for 2Q25: 🔴 Revenue was up a very healthy 26.2%. Shipment counts were up 23.6% and tonnage was up 20.4%. No other carrier is showing growth like this. 🔴 Margins worsened notably 6.1 points, with their OR increasing from 89.2 to 95.3. Integration costs from Dependable Highway Express and new terminal startup costs were the culprits here. Of course, the soft LTL market is not helping. 🔴Shipment size dropped -2.6% to 982 lbs, which remains on the low end of weight/shipment for the public carriers.  Most are well above 1,000 lbs. 🔴 Length of haul was up again, by 13.8%.  They are showing momentum here, indicating they are building density in longer-haul lanes and taking some market share. 🔴Rev/cwt excluding fuel rose an impressive 9.9%, though this was aided by their rapid length of haul growth as well as declining shipment sizes.   🔴 On a sequential basis, shipment counts were up 10.1%, tonnage was up 10.1%, and revenue was up 9.8%. These figures again indicate market share gains. 🔴On a sequential basis, their OR improved modestly from 96.4 to 95.3. 🔴3 more terminals and 250 doors were opened in 2Q25. This on top of 7 terminals and 200 doors in 1q25. For 2024, KNX LTL opened 51 new terminals and 1,430 doors. Network expansion is slowing for sure, but still ongoing. 🔴 Management expects 25% - 30% revenue growth in 3Q25 and an OR in the 93-94 range. Management noted that while they are posting strong growth, they are also now taking actions to accelerate the realization of cost efficiencies and align resources with freight volumes. And they noted that they continue to look for both organic (grow internally) and inorganic (purchase a carrier) opportunities to expand their network. The big puzzle piece missing remains the Northeast. Merging two LTL carriers onto one cohesive platform is very hard. Merging a 3rd is that much harder. KNX LTL should be commended for the impressivework they have done here. The culture side of the change management is ongoing, and more challenging, but is getting done. And that’s what sets KNX LTL’s path apart from their peers. It's a great story to watch.     

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