Mullen Group posts record Q2 results, sees no sign of ‘freight recession’

Mullen Group enjoyed a record second quarter, with revenue soaring 67% to $521.5 million, and profit nearly doubling to $42.7 million year over year.

The strongest gains came in the LTL segment, where revenue was up 66%. The specialized and industrial services segment was up 51%, thanks to increased oil and gas drilling activity buoyed by higher oil prices.

Acquisitions and an ability to pass along price increases were the drivers behind the strong growth, said Murray Mullen, chairman and senior executive officer. (The company has eliminated the term ‘chief’ from job titles.)

Mullen truck
(Photo: Greg Decker)

“Consolidated revenues reached record levels driven by previously announced acquisitions, general pricing increases, fuel surcharges and steady customer demand in all four operating segments backstopped by consumer spending and overall economic activity that remained at elevated levels throughout the quarter,” Mullen said in a release.

“In addition, there was an overall increase in oil and natural gas activity — a trend I believe will be sustained for the foreseeable future given the high commodity pricing environment. Our strong performance was achieved despite overall economic activity continuing to be negatively impacted by bottlenecks and supply chain disruptions, limiting growth in the economy as well as being a major reason productivity has deteriorated and inflationary pressures remain higher than normal.”

However, Mullen added there’s reason to believe economic activity will begin to slow as inflationary pressures impact consumer spending. “Overall, our pace of growth will moderate over the next quarters as we delay future acquisitions,” Mullen said, adding he anticipates the strong job market will keep consumer spending from crashing.

On a conference call with analysts, Mullen provided more color into the current freight market.

What freight recession?

“What about this freight recession investors are spooked about? I don’t see it,” Mullen said. “Demand is not collapsing. There’s less capacity to move available freight…our results should be just fine, especially with sticky freight rates.”

Mullen said he hears the same sentiment from peers in the industry on both sides of the border.

“We have not seen any meaningful decline in demand,” he said. “I know the markets are anticipating the freight recession, and once social media gets a hold of it, everybody thinks it will happen until new data comes out that challenges the new thesis.”

However, Mullen cautioned, “We don’t see any growth. We can’t add growth because we can’t get equipment, can’t get people, and we’ve lost productivity.”

He feels there’s more supply-side risk than demand-related risk.

“Our warehouses are plugged, we can’t get rail service, we’re losing trucking capacity because of high fuel prices.”

M&A on the back burner

Mullen Group made six acquisitions in 2021 but is putting purchases on pause, despite plenty of opportunities.

“My In-Basket is plugged,” Mullen said, noting he hears of two opportunities per day. “That tells you there’s stress in the market. It tells you that maybe some sellers think they can catch the buyer asleep at the wheel. You don’t catch us asleep at the wheel.”

Sellers are showing strong margins and trying to capitalize, Mullen said, but he feels better opportunities will come along in the future and that sleepy capital markets aren’t rewarding acquisitions. “We’re not biting. I’ll wait it out…I’m not fishing right now – I don’t like it.”

Supply chain issues

The company is still struggling to procure new equipment due to supply chain backlogs, and will struggle to meet its cap-ex target of $60 million invested this year.

“We cannot grow our fleet right now because you cannot get [new equipment],” Mullen said. “At best you’re able to replace. There’s not enough capacity in the system for us to add more company trucks, and by the way, there are no drivers anyways so it doesn’t matter.”

But what really worries Mullen is the impact supply chain challenges have on independent contractors, especially when it comes to parts shortages.

“Where independent contractors are at real risk is the availability of parts,” he said. “They are not easy to get right now. If an independent contractor’s truck goes down because a clutch went out, it can be down quite a while and that’s 100% of your fleet.”

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James Menzies is editor of Today's Trucking. He has been covering the Canadian trucking industry for more than 20 years and holds a CDL. Reach him at or follow him on Twitter at @JamesMenzies.

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  • I think the analysis of the current market is spot on. Mullen is not asleep at the wheel. They have market control in market they want to be involved in working and maintaining. Growth has been stalled by poor truck performance and supply. Growth has been stalled by increased government interferences in inspections, audits, education, e-logs, load securement and planning. The industry at present is approaching a critical threshold of pure stupidity verses common sense. Freight movement takes opportunity, man power and resources. If you disrupt the equation the freight stops moving. Progress grinds to a halt. So if your trucks are parked at a dealership because a sensor error waiting for an incompetent analyst to say parts are on back order and it might be 2 days, 2 weeks or 2 months…not quite sure and your response is what does this sensor control, oh the pollution system. Bypass the damn system and shutdown that circuit and clear the codes so I regain my power and let me get back to work. Sorry can’t do that???? Or you sit at a customer after being pushed to get there a soon as possible and they called looking for you and want an ETA. When you arrive you wait for hours on a dock to get loaded and finally get your paperwork to find your e-log light up like a Christmas tree saying your in violation of the hours of service. The entire trucking structure is broken.

  • We need to bring a large profit tax on those that gov money 2 yrs ago that have profits this yr over 10 million dollars. This should also apply to oil companies and railways. The same should apply to any person who makes over $90,000 this yr that got C E R B or CRB money.