Covenant Logistics Group Sees Improved Market Conditions in 2025
Chattanooga, Tennessee-based Covenant Logistics Group (NASDAQ: CVLG) reported total revenue of $277 million for the fourth quarter, a 1% year-over-year increase. The company attributed the growth to improved market conditions in the freight industry.
Positive Outlook for Freight Market
"I think the environment is getting better," said Covenant Logistics Chairman and CEO David R. Parker. "I think optimism is getting better... I really believe that come March, that we're going to say freight is pretty good. And by June or July, somewhere in mid-summer, we're going to say there's a lot of freight."
Strong Performance in Truckload Operations
Total freight revenue increased 5% year-over-year to $251 million, with truckload operations showing a 3% increase to $190 million. Freight revenue per tractor per week rose 2% to $5,444.
Growth in Dedicated Segment
Covenant Logistics' dedicated segment revenue surged 17% to $91.7 million. The company has secured several new transportation bids in recent weeks, indicating strong demand in this segment.
Challenges in Poultry Industry
Despite the overall positive outlook, Covenant Logistics faced challenges in its dedicated fleet segment due to disruptions in the poultry industry. Avian influenza affected poultry-related freight movement, but Parker expects the situation to improve in the coming weeks.
2025 Outlook
Covenant Logistics anticipates a 2.5% rate increase on 55% of its business in 2025, leading to consolidated earnings growth. The company believes that improved market fundamentals will enable it to negotiate better pricing and drive revenue growth.