With fuel prices up and the economy still recovering, Covenant Transport reported a drop in earnings and freight revenue this spring compared with a year ago.
The Chattanooga-based trucking giant reported Tuesday that it earned a profit of $1.7 million, or 11 cents per share, on freight revenue of $133.6 million in the three months ended June 30. In the same period a year ago, Covenant earned $2.9 million, or 20 cents per share, on freight revenue of $126.3 million.
Diesel prices paid by Covenant truckers were up 32 percent from a year ago while higher labor costs added another 2 cents per mile. Most of the increases in gas prices were passed along in higher fuel surcharges for shippers.
"Average freight revenue per total mile increased an encouraging 6 percent, which we attribute to improvements in our freight mix and customer recognition of the combination of service and capacity that the Covenant Transportation Group companies offer," Covenant CEO David Parker said in a statement after the stock market closed Tuesday.
But the higher rate per mile was offset by a drop in miles driven and the rise in fuel costs, driver pay and insurance claims this year, Parker said.
"We expect to continue managing our idle time and truck speeds, as well as invest in more fuel-efficient tractors to improve our fuel miles per gallon," Parker said.