Old Dominion Conference Call Transcript

During the Q & A (question and answer) portion, Frye got sorta peppered with requests to look under the covers how ODFL regards the drop in fuel and Fuel Surcharges--Fuel Surcharge revenue represents a big part of any mega's income sheet these days. Frye steadfastly declined to reduce the fog.

Then came a really interesting question, referring probably to Con-way's troubles with the Teamsters:

Con-way also had a conference call and I've started a thread on that, too. Executive Chairman Earl E. Congdon stepped in to answer the question of any labor trouble at ODFL:

That's a quote you won't hear from many outfits--"We have an excellent relationship with all of our employees. We work on it day and night. ..."

Labor trouble? Not happening. Period.

 

The next questioner pushes the labor question further. HTLD (Heartland/GTI), CNW (Con-way), SWFT (Swift) have all announced pay increases...

CEO David Congdon answered, nope:

 

Now, here's a question a mega OTR truckload carrier with 100% turnover isn't going to get:

Answer? Hey, we hired 2,000 new people this year and they're just getting into the groove!

No, at ODFL 'tenure is long and turnover is low'... Frye adds:

The questioner goes on to ask for more specific productivity info that a competitor could use and, just like for FSC (fuel surcharge), Frye just tells him that ODFL is not releasing that info. Does that a number of times, in fact.

'Thanks for asking. We're not giving you that...'

Actual:

You can ask, but...

 

Rail service is so poor that it represents less than .5% at ODFL:

ODFL is a service machine. No time for the slow train. Towards the end of the call, one analyst--after they again got stonewalled at length on fuel surcharge--all but asks Frye to predict the weather for 1st Quarter 2015. Breaks everybody up, laughter. He tells the questioner it's a negative impact for January and expects it to 'normalize' through the quarter. Right toe!!

Bad today, sunny tomorrow!! Not to worry. ODFL's on it...

 

The downside with OD is the stock price, at $74 and change, small fish like us can hardly afford to take a position. Just 10 shares'll cost you over $740!!

ODFL has 221 terminals and looks to add maybe 5 new this year, will spend $165 Million for land purchases this year, and mostly to expand existing centers. With an 84% cost/profit operating ratio, ODFL keeps $16 of every $100 that comes in compared to, say, Con-way that finally got below 97% last year. Keeping a few dollars/$100. And Con-way's bragging about it!

Con-way, in comparison, posted a Q4 (4th Quarter) operating ratio of 95.9% (keeping $4 of each $100 revenue) compared to 97.2% the year before, has roughly 300 terminals to ODFL's 221.

If it's all the same to ya, I'd rather be ODFL than CNW...

The sweet spot for ODFL is industrial, not the Wal-Marts or big-box retail who want it cheap, cheap, cheap. All the questions about breaking down freight charges got rebuffed except to say that ODFL looks at its customers on an account-to-account basis. Individually.

ODFL sees no need to 'buy' more business, like Heartland's coup in purchasing Gordon. No, ODFL sees its growth in extending its network, one LTL shipment at a time for customers who value service. S-e-r-v-i-c-e. SERVICE!!

Just imagine, ODFL hired 2,000 new employees within the ODFL network last year alone. With high tenure, low turnover. Typical mega truckload OTR outfits might shed that many, only to have to replace them again with 100% turnover.

Not ODFL. ODFL hired 'em, they'll stay and get more and more productive.

Part of the CapEx (Capital Expenditures) is new tractors and the analysts, of course, wanted to know how many new seats as opposed to replacements...

The answer was predictable, "We don't disclose that."

 

Hate to tell ya, Blair. Those Landstar brokers you're going up against soon--and I mean, going up against--will, as the song goes, 'call you maybe.' They'll forget you fast, too, although had one broker that kept calling and calling. Each time I'd refer them to our outfit's Illinois number and a week later they'd call me back again wanting to know if I were interested in a load out to...

Really wasn't much interested in going back to work for the outfit.

Don't know what you have projected, but I think Bright One (double yellow) and my buddy (Tim with Landstar), shoot for $1,000/day on a five-day/5-1/2 day week. The good news is that your mid-life crisis can have a happy, profitable ending... MAYBE!!

DESPITE WALKING AWAY FROM ODFL, ODFL, ODFL, ODFL, ODFL, ODFL, ODFL, ODFL...

(If you hear an echo in your ears, it's intentional and doesn't mean you've become schiz. It means you REALLY DID walk away from ODFL for all your new entrepreneurial headaches!!!!!! Sheesh!!!)

 

Run, schmun...

ODFL doesn't have room for a well-experienced ODFL driver as a solo in the ODFL network? Suppose there's some seniority issue... Dunno.

JUST SOUNDS LIKE A MID-LIFE CRISIS TO ME!!!

But whadda I know, eh?