April 2023 Business Update
Contributed by Dan Vander Pol, Co-President
FINANCIAL REVIEW OF FIRST QUARTER ’23
We did a great job of making the best out of what we were given in the first quarter. Our bill count was down 7% and we had a lot of weather issues towards the end of the quarter. We also continue to deal with very high equipment pricing, both for maintenance (up 19% from last year) and purchasing (new equipment is up 30-40% from 2 years ago). We overcame all those negatives and operated at a 93.52% compared to a 95.04% last year.
Why we operated better in the first quarter compared to last year:
The first is that we continue to do a great job of keeping our freight on our own trucks. When we have more freight then we can handle, we use other carriers for linehaul and for delivery (Cartage). The decrease in bill count and our focus on putting more freight in each trailer, along with some success in hiring has drastically reduced our purchase transportation expense.
The other big reason we operated well is our pricing. Account Managers and our Pricing team have continued to hold the line and get much needed increases from our Customers. When times have gotten tough in the past, LTL carriers tend to cut rates in order to attract more business. So far, we have not seen a lot of this and we are being very careful to stay away from this ourselves.
TERMINAL NETWORK EXPANSION
On the expansion front, both Salt Lake and Phoenix continue to grow and provide the premium service that our customers have come to expect from Oak Harbor.
Tuscon
Our next new terminal opening will be Tucson, AZ. We plan to open that terminal this year, which will improve and expand our service area in Arizona.
Patterson & Olympia
We plan to break ground in Patterson, CA in July/August and will hopefully be complete early next year. Olympia will likely break ground one year from now for their new terminal. Pictured below is the design for the Patterson terminal, this look is very modern and one we plan on establishing at our new Olympia location as well.
FUTURE FOR OAK HARBOR
The future at Oak Harbor continues to be very bright! While some carriers have chosen to cut costs and cut service during this slowdown in the economy, Oak Harbor has chosen to improve on time service and grow our network. This allows us opportunities with new customers and expanded roles at current customers.
We have a fantastic team in place and are so grateful for each one of you. We play a vital role in the supply chain and what we do everyday is extremely important to so many people.
