Total revenue for the quarter was $2.92 billion, slightly above analyst predictions but representing a 0.8% decrease from the previous year. The decline in revenue was driven by several factors, including a 5% reduction in the average number of trucks in the Dedicated Contract Services division, a 15% drop in stops within the Final Mile Services segment, a 13% decrease in loads handled by the Integrated Capacity Solutions (ICS) unit, and an 8% decline in gross revenue per load within the Truckload division.

Operating income for the quarter came to approximately $178.7 million, reflecting an 8% year-over-year decline. The intermodal division performed well, generating revenues of $1.47 billion, which was a 5% increase over the prior year and exceeded the expected $1.39 billion. Load volumes in this segment increased by 8%, with transcontinental loads rising by 4%, and eastern network loads growing by 13%. Despite the higher volumes, operating income edged down 7%, primarily due to lower yields per load.

Revenues from the Dedicated Contract Services segment declined to $822 million, down 4% from last year. This was mainly caused by a 5% decrease in the total number of trucks and a 2% reduction in productivity, measured as revenue per truck per week. The company’s forecast for this segment was roughly $904.4 million. When excluding fuel surcharges, productivity actually improved by 4%, supported by indexed-based price escalators, and operating income increased by 14%, reflecting better profitability per truck despite lower overall revenue.

Revenues in the Integrated Capacity Solutions (ICS) division fell 6% to $268 million, falling short of the estimated $281.7 million. The decline was largely due to a 13% reduction in loads; however, revenue per load rose by 6%, driven by increases in contractual and transactional rates and shifts in customer freight mix. The segment recorded a significant improvement in operating loss, narrowing to $2.7 million from $17.5 million in the same quarter last year. The ICS carrier base also contracted by 3%, mainly due to more rigorous carrier qualification standards.

The Truckload division experienced a 7% decrease in revenue, totaling $167 million, which was below the projected $174.4 million. When excluding fuel surcharges, revenues fell by 4%, mainly due to a 6% decrease in gross revenue per load, despite a slight 2% increase in load volumes. The fleet size at the end of the quarter was 1,852 tractors, down from 1,933 a year earlier, with trailer counts decreasing to 12,675 from 13,306. Interestingly, despite the revenue declines, operating income in this segment surged by 66%, reaching $2 million.

Finally, revenue from the Final Mile Services segment declined 12% to $201 million, missing the estimated $214.9 million. The decline was attributed to weakening demand across multiple end markets. Operating income in this segment plunged 69% year over year, impacted by lower revenues, higher insurance claims, increased premiums, and rising medical expenses for employees.