Dive Brief:
- Operating revenue in Ryder’s Supply Chain Solutions business grew 44% in Q4 to $883 million YoY, outshining other segments.
- Other arms of the business saw slightly slower growth, with Dedicated Transportation Services up 10% and Fleet Management Solutions, Ryder’s largest business, up only 2% YoY, according to an earnings release.
- Ryder said it expects to keep up continued earnings momentum in supply chain and dedicated services, part of a strategy for long-term growth.
Dive Insight:
Despite the financial upticks, the company projected overall operating revenue to slacken amid a “slowing macroeconomic and freight environment” in 2023, CFO John Diez said in prepared remarks.
While the transportation and logistics provider enjoyed back-to-back 14% growth in its Q4 operating revenue over the last two years, the company is forecasting a slower pace for 2023.
“Operating revenue is expected to grow approximately 4% as strong supply chain and dedicated growth is partially offset by the impact of our UK exit, OEM delays and normalizing rental conditions,” CEO Robert Sanchez said on a Feb. 15 earnings call.
Ryder saw surge in Q4 operating revenue in 2021 and 2022
| Year | Q4 operating revenue | Percent change YoY |
|---|---|---|
| Q4 2022 | $2.4 billion | 14% |
| Q4 2021 | $2.1 billion | 14% |
| Q4 2020 | $1.8 billion | 0% |
| Q4 2019 | $1.8 billion | 3% |
SOURCE: Ryder Q4 earnings releases, 2019–2022.
Growth in the supply chain business is due in part to M&A work, including the acquisition of logistics provider Whiplash and e-commerce fulfillment firm Dotcom Distribution. The additions brought Ryder’s Supply Chain Solutions’ U.S. customer accounts from 401 at the end of 2021 to 669 a year later.
“Acquisitions have helped transform our supply chain business, both in terms of expanding capabilities, as well as through balancing our vertical mix,” Diez said on the earnings call.
But falling used vehicle prices, inflationary pressures and other setbacks threaten those gains. In January, Ryder announced it was laying off 130 people at an Integrated Logistics facility near Los Angeles in Chino, California, due to a 3PL provider change, according to a Worker Adjustment and Retraining Notification database and letter.
Other carriers faced their own challenges in Q4. LTLs Schneider National and Yellow both saw drops in their Q4 operating revenue YoY.
“2023 has started off in a softer economic and freight environment than we experienced a year ago,” Schneider CFO Stephen Bruffett said on the carrier’s Q4 earnings call. “At the same time, we expect that the broader macro forces of supply chains and inventories will further rationalize in the early months of the year as our customers have been diligently working to address these issues for several quarters already.”
