The Schneider National rebound has shares popping more than 10 percent on February 2nd after the company’s leaders said they expect 2023’s results to strengthen as the year progresses and plan to grow their capital spending from 2022. The Wisconsin-based Schneider reported fourth-quarter net income of $110 million on revenues (excluding fuel surcharges) of $1.35 billion, numbers that were down 18 percent and 1 percent, respectively, from the last three months of 2021. Operating profits fell 19 percent, and the company’s operating ratio slipped about 2 percentage points to 90.8 percent as volumes slipped and pricing power faded.
Schneider National Rebound in 2023
Schneider booked truckload revenue per truck per week of $4,171 in its dedicated operations, which was down 8 percent from late 2021. In intermodal, where the company recently switched its Western rail partner to Union Pacific, better yields and network management helped improve the operating ratio by more than 7 points from the third quarter to 83.3 percent.
Improved Financial Performance and Capital Spending Plans
Looking ahead to 2023, company CEO Mark Rourke and his team are forecasting that Schneider will grow its adjusted diluted earnings per share to somewhere between $2.15 and $2.35. The midpoint of that range will be down 15 percent from 2022 and take the company back to its 2021 EPS production.
“We look forward to demonstrating the resilience of our diverse portfolio through evolving market conditions, while advancing our strategic priorities of dedicated, intermodal and logistics, disciplined investment in our business, and shareholder value,” said Stephen Bruffett, chief financial officer.
Freight Downturn Expected to End Soon
Rourke and Bruffett echoed a number of other fleet executives who have said in recent weeks that they expect the freight downturn to end in the coming months before ending 2023 on a stronger note. To help prepare Schneider for that improvement, they are allocating $525 million to $575 million to capital spending this year, a notable increase from last year’s $462 million.
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Schneider shares rose nearly 11 percent to $30.38 during the regular session on February 2nd but gave up a little of those gains after hours. Over the past six months, they have now climbed about 25 percent, growing the company’s market capitalization to $5.4 billion.
Cargo Theft on the Rise in 2022
Shippers and carriers should be vigilant as new data shows 2022 saw an increase in cargo theft from the year prior, and experts indicated it’s a trend that shows no signs of slowing. Theft prevention and recovery network CargoNet has reported that almost 1,800 theft claims were made by its members last year — an increase of 15 percent from 2021, which saw fewer than 1,300 incidents reported.
“You’re coming out of 2022 with severe momentum,” said Scott Cornell, transportation lead and crime and theft specialist at Travelers, adding that the data has been heading in this direction for several quarters. “The amount of stuff that’s going on right now, it’s just fast. It’s crazy, very intense, very frequent.”
Preventive Measures and Industry Collaboration
As cargo theft continues to rise, it is crucial for carriers, shippers, and other stakeholders in the transportation industry to collaborate and implement preventive measures. These efforts may include investing in advanced security systems, improving driver training, sharing theft data and trends, and working closely with law enforcement agencies to enhance overall supply chain security.
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In conclusion, Schneider National’s rebound and optimistic outlook for 2023 reflect the potential for growth in the freight industry. With increased capital spending, a focus on strategic priorities, and ongoing vigilance against cargo theft, the company is well-positioned to navigate the evolving market conditions and deliver value to shareholders.