Acquisitions, fuel surcharges, and rate increases pushed Mullen Group’s Q4 revenue and net income to record highs.

“It took a total team effort, some very favorable market conditions, and a strong economy to produce the 2022 results,” chairman and senior executive officer Murray Mullen said in a press release. “Our people, especially the frontline workers, worked tirelessly to meet the surge in freight demand and still maintain superior customer service. I know it was no easy task last year.”

Mullen said supply chain disruptions and shortages of key equipment helped improve pricing, but also acknowledged market conditions are changing.

“We have already shifted to managing the new market conditions, highlighted by rising interest rates and stubbornly high inflation. Under these macro conditions it is rational to conclude that consumer spending will moderate and the general economy will slow,” he said.

Q4 revenue totaled $502.7 million, a 12.8% increase year over year, while Mullen generated $2 billion in revenue on the year, up 35.3%. Profits for the fourth quarter jumped 204.5% to $61.5 million and were up 119% for the full year, to $158.6 million.

By segment, LTL revenue was up 13%, logistics and warehousing 16.7%, and specialized/industrial up 31.7%. Mullen’s U.S.-based 3PL segment saw revenue drop by $8.6 million to $52.6 million as demand for truckload shipments softened.

Growing profitability

In a conference call with analysts, Mullen said the company “fired on all cylinders” in 2022 to grow profitability. While it was quiet on the mergers and acquisitions front, Mullen said, “We did not like the asking prices, so we passed.”

That could change this year. “All we need is the right fit at the right price point,” he said, noting tuck-in acquisitions are preferred because they bring immediate synergies.

While December was a tougher month than expected due to how the holidays fell, followed by severe weather, Mullen said January numbers trended stronger than expected. However, he maintained his view that 2023 will be tougher due to rising interest rates and “stubbornly high inflation.”

If employment remains high, consumer spending should endure, maintaining current levels of freight demand, but Mullen said “We don’t see any overall demand growth.” Instead, 2023 will be a year to focus on costs and productivity initiatives to offset lower freight rates, he concluded.