Titanium Transportation grew consolidated revenue 11.5% year over year in the third quarter, to $113.4 million.
Logistics segment revenue inched up 0.3% to $59.6 million while truck transportation revenue grew 28.5% to $54.9 million.
“Third quarter results demonstrated the strength of Titanium’s asset management, strategic technology and sound operational execution across our growing US and Canadian business,” Ted Daniel, CEO, Titanium Transportation Group, said in a release.
“Against a backdrop of accelerating inflationary cost pressures that persisted during the quarter, Titanium delivered strong margin improvement in both the logistics and trucking segments reflecting a generally improved pricing environment year to date. Despite early signs of pricing pressure late in the quarter, US Logistics ended the quarter on solid footing.”
Titanium grew its brokerage operations to eight locations, including five in the U.S. The trucking segment’s earnings achieved new records for revenue and margins. The company says a favorable pricing environment and the addition of acquisitions drove the 28.5% year over year revenue growth.
Daniel warned, however, that rising interest rates and efforts by central banks to stem inflation have dampened consumer demand for freight and logistics services. The company expects overall industry growth to moderate.
“US Logistics was impacted by some pricing pressures and some excess capacity emerging,” Daniel told analysts on a call to discuss Q3 results.
The move to add Montreal and Windsor brokerage offices does not take away from the company’s long-term goal of growing this business in the U.S. Daniel said another U.S. location should be opened by the end of the year and described the Canadian offices as a “side hustle,” Windsor being run out of an existing facility there.
“Obviously, our strategy is to grow our platform in the very large U.S. environment,” Daniel confirmed. “We already owned the Windsor terminal – we added that because it’s extremely opportunistic for us. Montreal is a very large market and will do very well.”
Despite economic headwinds, Daniel said Titanium’s diversity of customer base, reliance on technology, and strong balance sheet have it well positioned. It continues with investments to update the fleet. CFO Alex Fu said the company is awaiting delivery of about 100 trucks and is maintaining its cap-ex budget despite deteriorating conditions. New trucks remain on allocation, Daniel added. “You can ask for 100 trucks, they’ll say ‘You’re only getting 60.’”
Business conditions have remained “steady” into October, and CFO Marilyn Daniel noted contract rates remain “sticky”.
In regards to softening conditions, Ted Daniel said “Offense is your best defense. Volatility can become an opportunity for us – we’re definitely looking to continue to grow.”
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