Old Dominion adding space to meet ‘heightened’ demand

Old Dominion double on highway

Old Dominion Freight Line announced Tuesday it has added or expanded terminals at seven different locations over the last two quarters. The capacity enhancements include additional doors and staff as well as technology upgrades to support “anticipated future growth and heightened customer demand.”  

The facility growth is part of the company’s initial 2022 guidance, which called for the opening or expansion at eight to 10 locations this year. Old Dominion (NASDAQ: ODFL) now operates 253 service centers in the continental U.S.

“Offering premium service is at the forefront of our value proposition,” stated Chip Overbey, senior vice president of strategic planning. “Each new and expanded facility helps to facilitate the economic growth of the local communities in which we operate while better serving our customers.”

The company opened a facility in Alliance, Texas (75 doors), which services the Dallas-Fort Worth area. The terminal will support three others in the area, providing 587 doors of total capacity to the north Texas-south Oklahoma corridor.

New centers were also opened near Memphis, Tennessee (102 doors); Kernersville, North Carolina (103 doors); and north of Seattle (52 doors). Facilities were also relocated in Iowa and South Carolina and a facility in Massachusetts was expanded.

Old Dominion’s 2022 capital plan calls for $825 million in expenditures, $300 million of which is slated toward real estate projects. The bulk of the remainder will be used to replace and add tractors and trailers.

A first-quarter update from the carrier in early March showed revenue per day was up 38% year-over-year in February following a 26% increase in January as it continued to “win market share.” Tonnage per day increased 8% year-over-year in January and was 18% higher in February. The February comp benefited from severe winter storms in 2021, which limited capacity throughout most carrier networks.

Old Dominion expects the capacity additions and upgrades to reduce shipment transit times and add delivery flexibility throughout the network.

Steady growth throughout the industrial complex along with robust e-commerce demand has LTL carriers racing to provide infrastructure to meet the need.

Saia (NASDAQ: SAIA) is looking to add 10 to 15 new terminals in 2022 in addition to relocating 10 existing facilities into bigger spaces.

XPO Logistics (NYSE: XPO) plans to add 900 doors by 2023, a 6% increase. The growth is part of a corporate breakup in which it will sell and spin off assets, leaving XPO as a stand-alone LTL carrier.

Watch: How rising fuel, lower spot rats, and record new carriers will impact the year

Source: freightwaves - Old Dominion adding space to meet ‘heightened’ demand
Editor: Todd Maiden