Titanium Transportation grew its Q2 volumes and revenue, but found profit to be elusive as a persistent freight recession combined with excess capacity created ongoing tough conditions.

The company grew its Q2 revenue 14.7% year over year, to $115.1 million. Truck transportation revenue climbed 20.7% while logistics revenue rose 6.6%. However, it posted an adjusted net loss of $113,000 compared to a net gain of $3.4 million in the same quarter last year.

“Market conditions remained challenging in the first half of the year, marked by persistent industry-wide pricing pressures, particularly in the full truckload segment,” CEO Ted Daniel said in an earnings release. “Despite this backdrop, we are pleased to report solid consolidated revenue growth of 14.7% over Q2 2023, driven by growth in both our trucking and logistics segments, as well as early benefits from the integration of our 2023 U.S. acquisition [Crane Transport].

“Although margin compression reflecting ongoing industry-wide pricing pressures impacted profitability, the company’s focus for the second half of 2024 remains on leveraging our strong U.S.-based presence in both our operating segments, streamlining operations through cost control initiatives, and prioritizing debt reduction.”

Daniel said the company is beginning to see signs of stabilization within the freight market, but he stopped short of guessing when conditions will improve. He went on to say Titanium has renewed its fleet, eliminating the need for capital expenditures on equipment, and plans to monetize underperforming assets.

Guidance trimmed

The company once again reduced its full year guidance from $470-$490 million in consolidated revenue, to $440 to $460 million.

On a call with analysts, Daniel said capacity has been slower to exit the market than anticipated. For Titanium specifically, he said the fact the fleet has been refreshed means free cash flow will improve in the second half of the year.

Daniel also said there are signs of a slowly improving market.

“Things haven’t gotten worse, they just haven’t gotten better yet,” he said of market conditions. “We believe we’re in a trough, but in a stable trough, which is better than a continuously eroding trough.”

He said shippers are also beginning to talk about locking in capacity. However, Titanium is not looking to be overly active on the asset-based mergers and acquisition front. It continues to look to add more U.S.-based freight brokerage offices.

Rail disruption

Asked about the potential impact of a rail disruption – lockouts by both major Canadian railways have been announced for Aug. 22 – Daniel said “There’s no way that the trucking industry has the capacity to all of a sudden carry the volume of freight that needs to go on rail. It’s going to cause a significant disruption if that happens.”

Titanium is planning for such an event, but expects any boost in freight volumes to be short-lived.

And asked by analysts about the impact of the official wind-down of Pride Group operations, Daniel said it’s unclear how beneficial that will be to remaining players.

“Did Pride as an operation have an effect in the marketplace? It did. It was upsized, and significant predatory pricing was definitely a piece of it,” said COO Marilyn Daniel. “The fallout remains to be seen, but I do think there will definitely be an effect of that, which will be beneficial for those remaining in this space.”