Swift Transportation has slashed his profit outlook for the rest of year because the company is struggling weak freight volume and with covering the costs of past accidents, amongst other things.
The company has a number of excuses for its struggles. They say that delayed deliveries of new trucks has hurt the company. In addition, worker’s compensation claims and a class action gender discrimination lawsuit are eating into Swift’s profits.
Swift also blamed “logistical changes” toward long-term contracts that lower margins for carriers as a reason for their financial woes. In a post-Amazon world, shippers are more frequently choosing less-than-truckload operators for faster customer service, leaving Swift struggling to compete.
Swift president Richard Stocking says that the news isn’t all bad: “Although we are not satisfied with these developments, we are encouraged by many of the underlying operating trends we are experiencing in our business model. The benefits we are seeing with the new equipment and expect to realize over the next several years should far outweigh the short-term costs we are experiencing. Continued hard work across the organization is making a difference with driver satisfaction and turnover.”
Sources:
The Wall Street Journal
Transport Topics Online
Marketwatch