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In Slow Lane on Rate Hikes,  Reprint permission
Swift Transportation will bring in new management as it copes with the twin regulatory investigations that are hanging over the nation's largest truckload carrier. Jerry Moyes, chairman and CEO of the Phoenix-based trucking giant, said a new chief operating officer would be named in early November, but he declined in a conference call with reporters and investment analysts to identify the executive. Moyes' announcement came as Swift released a financial report on the third quarter that showed the company's growth in profit was lagging behind some of Swift's peers in a truckload market fueled by rapid economic expansion and tight capacity. Swift's overall revenue was up 16.6 percent to $727.3 million in the quarter ending Sept. 30, but backing out the $47.7 million in fuel surcharges, the company's revenue was up 12.8 percent. The net profit of $25.7 million was 4.5 percent better than the year-ago third quarter, suggesting Swift wasn't getting the full gains from the industry's rapid rise in rates. Moyes says 40 percent of Swift's revenue gain came from higher rates but that pricing hadn't gone up in the quarter as much as it had in the first half of the year. "We hit the rate increases pretty hard in the first and second quarter and we just weren't getting a lot of contracts coming up for renewal in the third quarter," he said. "We think you'll see rate increases continue into the fourth quarter and into next year." Swift also is trying to accelerate its returns from fuel surcharges at the same time. "We've had some pretty ugly meetings over fuel in the last couple of months," he said. The company faces potentially deeper troubles with an ongoing Securities and Exchange Commission investigation of insider stock trades and a federal probe of Swift's safety record. Hiring a COO may be aimed at allaying concerns over those issues. Moyes said that person is expected to take the office by the end of the year and be part of the leadership succession plan at the company. The post "will evolve into president," he said. However, he denied reports that he will relinquish the CEO title in splitting those responsibilities from his role as chairman. "They're putting a tombstone out there with 'CEO' on it," said Moyes.
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