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Miller said that demand has remained stable, though the expected seasonal uptick in freight volume has yet to materialize. (Knight-Swift Transportation Holdings)

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Knight-Swift Transportation Holdings in third-quarter earnings despite a modest revenue gain, as the Phoenix-based truckload carrier navigated continued market uncertainty.

The company posted net income of $7.86 million, or 5 cents a diluted share, for the three months ended Sept. 30. That compared with $30.5 million, 19 cents, a year earlier. Total revenue increased 2.7% to $1.93 billion from $1.88 billion.

Consolidated operating income decreased 38.2% year over year to $50.3 million, primarily due to $34.8 million of impairments, an $11.2 million third-party carrier insurance charge and $12 million in U.S. Xpress claim costs. The impairments included $28.8 million in trade name write-downs from the decision to combine less-than-truckload brands, and $6 million in property lease and software impairments. Adjusted operating income rose 4.2% to $106 million.

“The third quarter saw freight markets still grappling with uncertainty, with many shippers hesitant to take much risk, and freight demand trends that continue to deviate from normal seasonal patterns,” Knight-Swift CEO Adam Miller said during a call with investors. “However, the third quarter brought more proactive customer discussions around peak-season projects than we have seen since 2021. Some of these involve customers who did not express any such needs last year. Some peak projects are already underway.”

Miller added that demand has remained stable, though the expected seasonal uptick in freight volume has yet to materialize. He recalled how some peak-season shipping projects developed almost overnight during the fourth quarter last year, but he said he doesn’t have enough visibility to forecast whether that will happen again this year. He is taking a more cautious approach to expectations for Q4.

“Despite some of the uncertainties in the present environment, we see a number of factors that make the opportunities of the next cycle more compelling for our businesses,” Miller said. “First on the demand front, despite all the noise from tariffs and the shift in freight ordering patterns, demand has remained relatively stable throughout our different truckload brands. We believe the value we deliver through our scale, flexibility and service has allowed us to maintain most of our volume in the challenging market.”

Miller said he’s seen less churn of incumbent lanes early in the new bid season, contrasting with last year’s bid season when a similar pricing approach produced more churn and lower volume awards. Some shippers at the time were still pursuing discount offerings, especially through brokers, but more recently, customers have become more selective about carriers.

“As far as capacity, we expect ongoing attrition on a number of fronts,” Miller said. “That includes the recent and developing regulatory focus on enforcement of standards related to English language proficiency, and the qualifications and controls around the issuance, renewal and revocation of non-domicile CDLs, which we believe may have an outsized impact on the lowest price capacity in the one-way, over-the-road market.”

Segment Breakdown

• Truckload revenue decreased 2.1% to $1.08 billion from $1.11 billion. Operating income fell 20.8% to $35.9 million from $45.4 million, driven by a 2.3% decrease in loaded miles. Revenue per loaded mile was stable year over year and sequentially recovered part of the second-quarter dip. Adjusted operating income declined $7.3 million largely due to higher insurance costs from settling two U.S. Xpress accident claims from 2023.
   
• LTL revenue increased 21.5% to $340.5 million from $280.2 million. The segment swung to an operating loss of $1.69 million from operating income of $24.6 million. Revenue per hundredweight rose 6.1%, while revenue per shipment climbed 6.6%. The operating loss stemmed from a $28.8 million trade name impairment tied to combining the LTL brands under the AAA Cooper name; adjusted operating income rose 10.1%.
   
• Logistics revenue slipped 2.2% to $140.4 million from $143.6 million, while operating income rose 2.3% to $6.84 million from $6.68 million. The revenue decrease reflected a 6.2% decline in load count, partially offset by a 3.6% increase in revenue per load. Company leadership continues to leverage power-only capabilities to complement the asset business.
   
• Intermodal revenue decreased 8.4% to $94.1 million from $102.7 million. The operating loss, which worsened 65.7% to $2.3 million from $1.39 million, included a $2.5 million impairment charge for a software project. Excluding that expense, the adjusted operating ratio improved 160 basis points year over year to 99.8, driven by a 3.5% increase in revenue per load as well as cost reductions and network balance improvements.

Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. Knight-Swift is the top-ranked carrier on the truckload sector list, while AAA Cooper ranks No. 11 among LTL carriers. Knight-Swift also ranks No. 31 on the TT Top 100 logistics companies list.

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