Schneider has announced Q1 2020 results, reporting revenues of $1.12bn, compared to $1.2bn in Q1 2019. Operating expenses went up by $6.3m, to $479.6m.
Revenue for its Transportation division totalled $1.03bn, showing a decrease of $43.1m Y-o-Y.
Truckload revenues decreased $62.4m, approximately 12%, in the first quarter of 2020 compared to Q1 2019, primarily due to $31.6m from the shutdown of its First to Final Mile (FTFM) service offering and a 3% decrease in price. Compared to Q1 2019, price was down due to a softer freight market and lower published and spot rates. Volume had a minimal impact on reduced revenues as stronger volumes in the latter part of the quarter, driven by an increase in demand for essential consumer products due to COVID-19, offset the softer market conditions early in 2020. Truckload income from operations increased $13.4m, approximately 58% compared to Q1 2019, due mainly to the removal of FTFM operating losses, which were $12.1m in the first quarter of 2019, as a result of the structured shutdown of the service offering in 2019.
Intermodal revenues increased $0.4m in Q1 2020 Y-o-Y. Orders increased 3% primarily due to growth in the East and Mexico, despite a declining overall domestic intermodal freight market, while revenue per order decreased $98, or 4%. The decrease in revenue per order was largely attributable to a higher mix of shorter length of haul volumes within the East. Intermodal income from operations decreased $3.6m, approximately 18% Y-o-Y. Revenue increases, as explained above, were more than offset by increased rail purchased transportation costs.
Its Logistics Management division fell to $31.1m, from $58.1m in Q1 2019.
Logistics revenues decreased $4.3m, approximately 2%, compared to Q1 2019, resulting primarily from warehouse management functions being insourced by one of the Company’s import/export customers in April 2019. This decrease was partially offset by increased revenues within its brokerage business due to volume growth compared to the same quarter in 2019, despite continued compression of rates. Logistics income from operations decreased $6.1m, approximately 59% Y-o-Y, primarily due to compressed net revenue in brokerage.
Revenues in Other decreased slightly to $99.4 from $99.9.8m in Q1 2019. Included in Other was a loss from operations of $2.2m in the first quarter of 2020, which was materially unchanged from the loss in the same quarter in 2019 of $1.9m. On July 29, 2019, the Company’s Board of Directors approved a structured shutdown of its FTFM service offering within its Truckload reportable segment, which was substantially complete as of August 31, 2019.
The company reports that the COVID-19 impacts have not been significant regarding its Q1 2020 financial results.
Schneider states, “While we are unable to quantify the expected overall effect of COVID-19 on our operational and financial performance, we have experienced a decrease in demand in April resulting from imposed stay-at-home orders and the related closure of certain of our customers. The impact has been primarily in our truckload and intermodal operations which both saw steady declines in volume before stabilizing in late April. […] Many drivers have been redeployed to areas within our portfolio where there is a need; however, we have seen an overall reduction in revenues. We currently estimate the largest impacts of COVID-19 on our business will be incurred in the second quarter, and steady improvement will be seen during the third and fourth quarters. We have implemented cost reduction efforts to help mitigate the impact reduced revenues may have on our full-year 2020 income from operations; however, we do not anticipate these reductions will fully offset the decline in revenues. We are reducing expenses through decreases in discretionary spending, including travel and entertainment, tightening the management of spend related to hiring and headcount, and various other measures.”
Source: Schneider
