Two of the US’s largest truckers reported a sharp dip in earnings as adverse market conditions persisted.
Werner Enterprises reported a 43% fall in year-on-year net profit. In the second quarter, profit slowed to $ 18.3 million or 25 cents per share from $31.8 million or 44 cents per share in the same period last year.
The Nebraska-based company operates a fleet of 7,300 trucks and is mainly focused on long distance routes for individual customers.
Competitor Swift Transportation, based in Phoenix, reported a similar downtrend. Its net profit decreased almost 16% in the second quarter to $42.9 million from $51 million in the same period last year, or a 4 centavo dip from 35 cents per share price from a year ago.
Both truckers credit their earnings doldrums to lower fuel surcharges, which are fees charged to clients as buffer for fluctuations in diesel prices. Basic prices have also fallen as a result of overcapacity and slow demand.
In a letter to its shareholders, Swift described the 2016 trucking climate as “challenging,” while Werner said it is feeling the pressure as customers “pushed harder” for contractual rate decreases.
