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Old Dominion (ODFL) Boosts Capacity to Meet Increased Demand
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Old Dominion Freight Line, Inc. (ODFL - Free Report) has announced that it plans to open 8-10 service centers in 2022 to cater to the buoyant demand scenario. To this end, it added or expanded terminals at seven different locations over the last two quarters. Different locations include Alliance, TX; Byhalia, MS; Clear Lake, IA; Kernersville, NC; Marysville, WA; West Columbia, SC; and Westfield, MA.
The capacity enhancements include additional doors and staff, as well as technology upgrades (real-time track and traceability), to support growth and increased customer demand. The strategic locations reduce shipping time, enhance delivery flexibility and increase capacity in key metropolitan areas.
Expressing delight at the extent of capacity enhancements, Chip Overbey, senior vice president of strategic planning, stated, “Offering premium service is at the forefront of our value proposition. Each new and expanded facility helps to facilitate the economic growth of the local communities in which we operate while better serving our customers.”
With the improving freight demand scenario, ODFL’s decision to boost capacity is a prudent one. Old Dominion is benefiting from the strong performance of the Less-Than-Truckload (LTL) segment, owing to better freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis. In 2021, LTL shipments and LTL revenues per shipment increased 18.5% and 10.2%, respectively.
With the added or expanded terminals, LTL revenues are likely to receive a further boost. This should aid the company’s results. Notably, ODFL will release its first-quarter 2022 results on Apr 27.
Zacks Rank & Other Stocks to Consider
Old Dominion currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader Zacks Transportation sector can also consider other top-ranked stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in the past four quarters. The uptick is aiding the company in airfreight revenues. We are optimistic about EXPD’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
The expected long-term earnings per share (EPS) (three-to-five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With the easing of the coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third and fourth quarters of 2020, as well as the four quarters of 2021.
Driven by the positives, the stock has rallied 25.6% in the past year. TRTN currently carries a Zacks Rank #2.
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Old Dominion (ODFL) Boosts Capacity to Meet Increased Demand
Old Dominion Freight Line, Inc. (ODFL - Free Report) has announced that it plans to open 8-10 service centers in 2022 to cater to the buoyant demand scenario. To this end, it added or expanded terminals at seven different locations over the last two quarters. Different locations include Alliance, TX; Byhalia, MS; Clear Lake, IA; Kernersville, NC; Marysville, WA; West Columbia, SC; and Westfield, MA.
The capacity enhancements include additional doors and staff, as well as technology upgrades (real-time track and traceability), to support growth and increased customer demand. The strategic locations reduce shipping time, enhance delivery flexibility and increase capacity in key metropolitan areas.
Expressing delight at the extent of capacity enhancements, Chip Overbey, senior vice president of strategic planning, stated, “Offering premium service is at the forefront of our value proposition. Each new and expanded facility helps to facilitate the economic growth of the local communities in which we operate while better serving our customers.”
With the improving freight demand scenario, ODFL’s decision to boost capacity is a prudent one. Old Dominion is benefiting from the strong performance of the Less-Than-Truckload (LTL) segment, owing to better freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis. In 2021, LTL shipments and LTL revenues per shipment increased 18.5% and 10.2%, respectively.
With the added or expanded terminals, LTL revenues are likely to receive a further boost. This should aid the company’s results. Notably, ODFL will release its first-quarter 2022 results on Apr 27.
Zacks Rank & Other Stocks to Consider
Old Dominion currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader Zacks Transportation sector can also consider other top-ranked stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in the past four quarters. The uptick is aiding the company in airfreight revenues. We are optimistic about EXPD’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The expected long-term earnings per share (EPS) (three-to-five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With the easing of the coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third and fourth quarters of 2020, as well as the four quarters of 2021.
Driven by the positives, the stock has rallied 25.6% in the past year. TRTN currently carries a Zacks Rank #2.