Industrial demand picks up at last, some trucking companies report

Struggling industrial demand has revealed the manufacturing sector’s critical importance to the trucking industry during the freight recession of the past two years.

Some carriers finally began reporting green shoots in Q4 earnings calls, after prolonged industrial weakness skewed their freight mixes toward less-profitable retail shipments.

Others are still waiting to record a noticeable bump in manufacturing demand, even as the Institute for Supply manufacturing index flipped positive, indicating a return to growth, in January. 

We’ve pulled together some executives’ commentary to provide a glimpse of what they’re seeing — and anticipating this year — from their industrial customers. 

Old Dominion’s industrial demand outpaces retail

Old Dominion Freight Line’s industrial business outperformed retail demand in Q4 “for the first time in a while,” EVP and CFO Adam Satterfield said on an earnings call.

The news was a bright spot in the carrier’s earnings results, which featured a 21% decline in operating income and drops in shipment volumes, weight per shipment and tonnage per day.

“The revenue performance with those industrial-related customers is actually a little bit better than the overall company performance,” Satterfield told analysts. “That kind of goes hand-in-hand with the enthusiasm that we’re hearing from customers today.”

The industry is being cautious about declaring an industrial rebound too early, the CFO said.

“Typically, it’s a couple of months’ lag when we see that perform in terms of the acceleration coming through, I’d say, for the industry overall,” Satterfield said. “But certainly, we’re in a great spot to take those increased shipments if they materialize.”

XPO’s customer sent…