Fall 2025
Business Update
Well, it is beginning to look a lot like…fall and winter. For some that comes with a lot of excitement as the holidays are approaching, kids are all back in school, and temperatures are cooling down. For our business, it typically means things are slowing down a bit. Summer is always our busiest season. With fall and winter being slower, we can use those times to refine our processes, focus on the basics, and ensure we are operating efficiently so that when things pick back up, we are ready for the surge in business.
This year and this fall, that slowdown has been sadly a bit more pronounced. Year to date our operating ratio is sitting at 95.84% compared to 93.31% the prior year. As a company, we set for ourselves some lofty goals for 2025. Goals that in a slightly improved economic setting would be tough to hit.
95.84%
Year to Date
Operating Ratio
93.31%
2024 Year to Date
Operating Ratio
As it turns out, we are trying to hit those aggressive goals during the third straight year of a freight recession. There are a few factors outside of our control that are significantly impacting our ability to hit those goals.
Without going too deep into each goal I thought I would highlight a few of those headwinds we are facing:
Weight per Shipment / Revenue per Shipment
As a company our weight per shipment is down 3% year over year. Why is this so important? Our cost to deliver a pallet of goods to a business is pretty fixed, and very consistent. A drivers wage, fuel costs, truck costs etc… these all remain the same regardless of the weight of a pallet. However, the revenue we collect on that pallet is dictated by the weight. Our customers buy space in our trailers. If our costs rise, and the revenue doesn’t increase along side that, our profitability suffers as a result. For the year our revenue per shipment is flat year over year, while our costs have risen.
Tariffs
It is tough to point directly to how much tariffs have impacted our business, but I can confidently say they have. When we talk to customers and they acknowledge they are slower as a result of tariffs, we know we are impacted. This plays a big part into my first point on weight per shipment, customers are operating a bit leaner and keeping maybe a little less product on their shelves.
Rising Fixed Costs
The last thing I would point to that is hindering our profitability is rising fixed costs, mainly in insurance and healthcare. This is something I believe all of you are experiencing in your own daily lives as well. In tough economic times like this, trying to recoup these costs by charging higher rates in a tough uphill battle.
That is enough of focusing on the negative though. We are too blessed to only focus on our struggles. There are a lot of good things going on at Oak Harbor that point us to a bright future.
Late Deliveries
18%
Year to Date
Reduction
The Good News
The first and biggest reason I can say that is the team that we are blessed with. Throughout the entire history of this company, God has always put the right people on the team at the right time to be successful. 2025 is no different, we know we have the right team to navigate a freight recession and ensure our longevity moving forward.
In addition, our service is at the highest I have seen in many years, and certainly the highest in the post COVID era. Year to Date we are sitting at 96.49% on time service compared to 95.64% the prior year. We have reduced our number of late deliveries by over 10,000 shipment this year, reflecting an 18% improvement in that number. That is a lot more peace of mind that we are delivering to our customers. Efficiency has also improved from 0.96 bills per hour up to 0.99 bills per hour. These improvements don’t happen by accident, it takes a consistent attention to detail to show this kind of change.
On-Time Service
96.49%
Year to Date
Compared to 2024’s
95.64%
Year to Date
Bills Per Hour
0.99
Year to Date
Compared to 2024’s
0.96
Year to Date
In summary, we know the future is bright for Oak Harbor Freight Lines. We are positioned well as the only full western regional LTL provider in our industry. We have a well oiled operating machine that is ripe and ready for more freight to run through it. And while this winter could be slow and we will likely see more softening before it gets better, we know we can navigate through whatever life throws at us because of the team assembled.
We thank you all for what you do, and if I don’t see you beforehand…have a Happy Thanksgiving and a Merry Christmas!
