Summer 2025
Business Update
Writing this on July 23rd, as we enjoy another great Summer in the PNW. I wish the economy was as good as the weather, though. Our shipment count YTD is up 5%, which is pretty good especially considering most LTL carriers are flat or down YOY. But, Revenue per Bill is flat and our expenses are up which is eating away at our OR. YTD we are at a 96.04 OR compared to a 93.75 YTD in 2024.
There are 3 big buckets that are hurting us right now:
Compensation
Pay is up about $6 million over last year in just 6 months. We did a pay increase along with more employees. I think everyone is in favor of the pay increase, but we need to make up for that with getting increases from our customers, which has been more difficult this year.
Healthcare
We are up $1.6 million in Healthcare expenses from last year, which was already a bad year for healthcare. We are blessed at Oak Harbor to have great healthcare benefits, but we also feel the pain of the ever increasing costs of this. We are not paying traditional insurance for our healthcare, we are essentially self insured . This means that when you see your healthcare costs covered by insurance, that is a direct payment from Oak Harbor paying for your healthcare costs. This saves us money from insurance providers mark ups, but exposes us to bigger swings in costs.
Fuel
The last big item that is causing us to go backwards on the OR is fuel costs. Our Fuel Surcharge with Fuel Expenses deducted has deteriorated by $2 million from last year. This is due to most of our contracts using National Fuel Pricing for their surcharge tables. National fuel prices have dropped while West Coast prices have not. This difference is especially noticeable when looking at WA and CA where we buy a lot of our fuel. Both WA and CA have Carbon taxes, a hidden tax that those states have put on fuel suppliers for their role in producing carbon. In WA, it raises fuel prices at least 50 cents per gallon with an increase in price on the horizon. In a traditional gas tax, that money has to be used for roads and bridges, but the carbon tax does not, so the state governments can use that money for anything they deem will help reduce carbon.
Areas to Improve
Looking at the different regions of Oak Harbor’s Business, we continue to be slow in WA and OR. We continue to grow in AZ, UT and Southern CA. The other areas we are servicing are fairly flat.
We have fared better than most through this slow down period and we are well positioned to succeed when the economy does kick back into gear. Our service continues to be the best in the industry and our overnight and two-day reach is 2nd to none. This service is highly desirable and when we do lose a customer, they usually come back due to the superior service we provide.
We are continually grateful for the hard work our employees do to make our Oak Harbor the best in the West!
