올드 도미니언 프레이트 라인(ODFL) 2026년 3분기 실적 발표 컨퍼런스 콜: 마진 개선 및 4분기 매출 가이던스

핵심 요약

• 올드 도미니언 프레이트 라인(Old Dominion Freight Line)은 2026년 3분기 매출이 전년 동기 대비 13.1% 증가한 15억 9,000만 달러를 기록했으며, 희석 주당순이익(EPS)은 28.9% 증가한 1.65달러를 기록했다고 발표했습니다.
• 영업비율(Operating ratio)은 매출 성장, 영업 효율성, 감가상각비 감소에 힘입어 280베이시스포인트(bp) 개선된 71.5%를 기록했습니다.
• LTL(소화물 적재) 100파운드당 매출은 13.3% 증가했습니다. 이번 분기 하루 평균 LTL 물동량(톤)은 0.1% 감소했으나, 9월에는 전년 동기 대비 1.6% 증가했습니다.
• 10월 누적 일평균 매출은 하루 평균 LTL 물동량이 1.6% 증가한 것을 포함해 전년 동기 대비 약 22% 증가했습니다. 경영진은 4분기 매출을 15억 4,000만 달러에서 15억 8,000만 달러로 예상하고 있습니다.
• 회사는 99%의 정시 운송 서비스율과 0.1%의 화물 손실·손상 청구 비율을 유지했습니다. 또한 향후 물동량 증가를 지원하기 위해 35% 이상의 여유 부동산 용량을 확보하고 있습니다.
• 디젤 및 석유 기반 제품 가격 상승과 건강 및 치과 관련 비용 증가가 주요 비용 압박 요인으로 남았습니다.

핵심 재무 데이터

사업 및 영업 실적

전분기 대비 기준, 3분기 일평균 매출은 2026년 2분기보다 2.4% 증가했습니다. 하루 평균 LTL 물동량(톤)은 1.2% 증가했고, 일평균 배송 건수는 2.4% 늘었습니다. 9월 일평균 물동량은 8월 대비 3.9% 증가해, 10년 평균 전월 대비 증가율인 3.1%를 상회했습니다.

분기 말로 갈수록 수요 추세가 강화되었습니다. 9월 하루 평균 LTL 물동량은 전년 동기 대비 1.6% 증가했으며, 10월 누적 건당 배송 중량은 약 3% 증가했습니다. 경영진은 배송 중량 증가를 건설적인 수요 지표로 설명하며, 고객과의 논의, 입찰 활동, 다년 계약에 대한 관심이 업황 개선 가능성을 가리키고 있다고 말했습니다.

가격 결정력은 견조하게 유지되었습니다. 10월 LTL 100파운드당 매출은 유류할증료 포함 시 약 20% 증가했고, 유류할증료 제외 시 5.5%~6% 증가했습니다. 전년도에는 11월에 일반 요금 인상을 시행했던 것과 달리, 올해는 10월 초에 시행함에 따라 비교 실적이 개선되는 효과를 보았습니다.

서비스 품질은 핵심적인 경쟁 차별화 요소를 유지했습니다. 올드 도미니언은 99%의 정시 운송 비율과 0.1%의 화물 손실·손상 청구 비율을 기록했습니다. 또한 마스티오(Mastio) 설문조사에서 17년 연속 전국 최고의 LTL 운송업체로 선정되었으며, 평가 대상 28개 항목 중 24개 부문에서 1위를 차지했습니다.

평균 인원은 일평균 배송 건수가 2% 감소한 것에 비해 전년 동기 대비 4% 감소했습니다. 경영진은 1분기부터 3분기까지 물동량이 5%~6% 증가했음에도 불구하고 상근직 인원수는 2만 명을 약간 상회하는 수준에서 대체로 안정적으로 유지되었다고 밝혔습니다. 회사는 계속해서 대부분의 운전기사를 내부적으로 교육하고 있으며, 필요할 때 운전기사를 채용하는 데 큰 어려움을 겪지 않았다고 말했습니다.

경영진 가이던스

경영진은 최근 매출 추세가 유지된다고 가정할 때 4분기 매출을 15억 4,000만 달러에서 15억 8,000만 달러로 예상하고 있습니다. 이는 회사의 통상적인 계절성을 상회하는 실적 전망을 의미합니다.

연례 보험수리적 조정을 제외하면 4분기 영업비율은 보통 전분기 대비 200~250베이시스포인트(bp) 상승합니다. 경영진은 현재의 매출 추세가 지속될 경우 해당 정상 범위의 하단에 상하 약 20bp의 유연성을 둔 수준이 적절한 목표라고 말했습니다.

경영진에 따르면 이번 4분기 전망에는 약 45%의 증분 이익률이 반영되어 있습니다. 또한 회사는 4분기 실효세율을 24.8%로 예상하고 있습니다.

2027년 자본 투자 계획은 아직 확정되지 않았습니다. 다만 기존 운송 장비로 추가 성장을 지원할 수 있기 때문에, 총자본적 지출이 통상적인 매출 대비 10%~15% 수준 이하를 유지할 것으로 현재 예상하고 있습니다.

리스크 및 관전 포인트

복리후생비가 예상보다 빠르게 증가했습니다. 3분기 급여 대비 복리후생비 비중은 전년 동기 39.7%에서 42.8%로 상승하여 영업비율에 약 1%포인트의 부정적 영향을 미쳤습니다. 경영진은 건강 및 치과 비용이 4분기에도 잠재적인 부담 요인으로 남을 것으로 예상하고 있습니다.

디젤 가격 상승과 기타 석유 관련 비용 증가로 인해 영업 소모품 및 경비가 늘어났습니다. 유류할증료가 매주 조정되고 경영진은 시간이 지남에 따라 이 제도가 이익 기여도를 보존할 것으로 기대하고 있지만, 높은 연료비는 단기적인 비용 압박이자 고객과 소비자 전반의 우려 사항으로 남아 있습니다.

화물 수요의 회복세는 여전히 불균등합니다. 전년 동기 대비 물동량은 양호한 수준을 유지했으나, 10월 하루 평균 물동량은 전월 대비 5%~5.5% 감소해 10년 평균 감소율인 약 3.5%보다 컸습니다. 경영진은 인플레이션과 소비자 수요에 대한 고객의 지속적인 우려도 지적했습니다.

애널리스트 Q&A 하이라이트

• 처리 능력: 올드 도미니언은 35% 이상의 여유 부동산 용량을 보유하고 있으며 트랙터, 트레일러 및 인력 수용 능력도 충분하다고 밝혔습니다. 운송 장비 축소는 대폭적인 감축이라기보다는 선별적으로 이루어졌습니다.
• 영업 레버리지: 3분기 직접 변동비는 매출의 약 51%를 차지해 2022년 3분기보다 약 150베이시스포인트(bp) 개선되었습니다. 경영진은 네트워크 밀도가 향상됨에 따라 추가적인 매출 성장이 고정비 레버리지 효과를 제공할 것으로 기대하고 있습니다.
• 시장 점유율: 경영진은 특히 일부 경쟁사가 인력, 장비 및 픽업 제약에 직면한 상황에서 서비스 신뢰성과 가용 용량이 추가적인 점유율 확대를 뒷받침할 것이라고 말했습니다.
• 계약: 다년 계약은 일반적으로 2년으로 제한되며 물량 약정보다는 기본 요금 인상에 중점을 둡니다. 경영진은 이러한 계약에 대한 고객의 관심을 건설적인 수요 신호로 보았습니다.
• 3PL 전략: 회사 3PL(제3자 물류) 활동의 약 95%는 개별 고객과 연계된 계약 사업입니다. 경영진은 보다 동적이거나 거래적인 가격 책정 방식을 추진할 계획이 없습니다.
• 화물 구성: 경영진은 건당 배송 중량 증가가 부분적으로 수용 능력 제약에 직면한 풀트럭로드(TL) 운송업체로부터의 화물 전환을 반영할 수 있다고 설명했습니다. 고가치 및 시간에 민감한 데이터 센터 장비도 추가적인 기회가 됩니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day, and welcome to the Old Dominion Freight Line Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jack Atkins, Director of Finance and Investor Relations. Please go ahead.

Jack Atkins

Thank you, Dave. Good morning, everyone, and welcome to the Third Quarter 2026 Conference Call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today through November 4, 2026, by dialing 1 (855) 669-9658 access code 1955363. A replay of the webcast may also be accessed for 30 days at the company's website.

This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Old Dominion's expected financial and operating performance. For this purpose and any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in Old Dominion's filings with the Securities and Exchange Commission and in this morning's news release.

Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. As a final note before we begin, we welcome your questions today. They ask that you limit yourself to just 1 question at a time before returning to the queue.

At this time for opening remarks, I would like to turn the conference over to our President and Chief Executive Officer, Marty Freeman. Marty, please go ahead.

Kevin Freeman

Good morning, everyone, and welcome to our third quarter conference call. With me on the call today is Adam Satterfield, our CFO. And after some brief remarks, we will be glad to take your questions. Old Dominion produced strong financial results in the third quarter that include a 13.1% increase in revenue and a 28.9% increase in earnings per diluted share. In addition, our operating ratio improved by 280 basis points to a 71.5%. While the underlying macroeconomic environment remains stable, demand for our service continued to improve during the quarter, and our LTL tons per day increased on a year-over-year basis in September.

The strength of our third quarter results is due to hard work and dedication of our OD family of employees who continue to execute on the fundamental aspects of our long-term strategic plan. I want to thank our outstanding team for their dedication and commitment to our customers and our company. Our ongoing focus on providing our customers with superior service at a fair price is the cornerstone of our long-term strategic plan. our ability to consistently deliver the highest standard of service through the ups and downs of the economic cycle has created an unmatched value proposition in our industry. And this is something that we take tremendous pride in. As a result, in the third quarter, we were pleased to once again provide our customers with on-time service of 99% and a cargo claims ratio of 0.1%.

That said, we also know that there is much more to providing best-in-class service to our customers than simply picking up and delivering freight on time and without damages. During its annual survey of shippers and logistics professionals, Mastio & Company measures 28 different service and value-oriented attributes. We were honored earlier this month to be named the #1 national LTL provider for the 17th consecutive year. In addition, we finished first in 24 of the 28 categories that Mastio evaluates, and we increased our already sizable advantage against our competition. I would like to thank our customers for this recognition and for trusting us with their business. I also would like to congratulate our OD family of employees on this incredible accomplishment.

Our teams remain highly motivated to continue delivering superior customer service every single day. We know that the strength and consistency of our service drives value for our customers and differentiates us from our competitors. It also supports our long-term pricing initiatives. Our disciplined approach to yield management, which focuses on individual account level profitability is designed to offset our cost inflation over the long term while also supporting our ability to make strategic investments back into our business.

Our ability to take a long-term approach to the investments in our network, our people and our technology provides us with significant flexibility to respond quickly to changes in the operating environment. This flexibility allows us to support our customers with the capacity that they require, while also continuing to effectively manage our cost. As a result, we once again generated strong operating leverage on our incremental revenue this quarter. We produced strong third quarter results by remaining focused on executing our long-term strategic plan.

Due to our disciplined execution and consistent investment, we have all the necessary elements of capacity in place to effectively handle incremental volume opportunities, while also continuing to operate efficiently. In addition, our business model contains significant operating leverage, which will allow us to further improve our profits as we regain density in our network. As a result, we continue to believe that we are uniquely positioned within our industry to win market share, generate profitable revenue growth and increase shareholder value over the long term.

Thank you for joining us this morning. And now I will turn it over to Adam to discuss our third quarter in greater detail.

Adam Satterfield

Thank you, Marty, and good morning. Old Dominion's revenue increased 13.1% to $1.59 billion for the third quarter of 2026, while our operating ratio improved to 71.5%. The combination of these factors resulted in a 28.9% increase in our earnings per diluted share to $1.65. The improvement in our revenue for the quarter was primarily due to a 13.3% increase in LTL revenue per hundredweight. While our LTL tons per day decreased 0.1% for the third quarter, we were pleased with the continued improvement in demand for our service that contributed to a 1.6% year-over-year increase in our LTL tons per day for the month of September.

On a sequential basis, our revenue per day for the third quarter increased 2.4% when compared to the second quarter of 2026, with LTL tons per day increasing 1.2% and LTL shipments per day increasing 2.4%. For comparison, the 10-year average sequential change for these metrics includes an increase of [ 4% ] in revenue per day a decrease of 0.2% in LTL tons per day and an increase of 1.2% in LTL shipments per day.

The monthly sequential changes in LTL tons per day during the third quarter were as follows: July decreased 0.5% as compared to June. August decreased 1.6% as compared to July and September increased 3.9% as compared to August. The comparative 10-year average change for these respective months is a decrease of 3.0% in July, flat in August and an increase of 3.1% in September. While there are still a few workdays remaining in October, our month-to-date revenue per day has increased by approximately 22% when compared to October 2025. This includes an increase in our LTL revenue per hundredweight as well as an increase in our LTL tons per day of 1.6%. Based on these results, I currently anticipate revenue of $1.54 billion to $1.58 billion for the fourth quarter, which would be above our normal seasonality. As usual, we will provide the actual revenue related details for October in our third quarter Form 10-Q.

Our operating ratio improved 280 basis points to 71.5% for the third quarter of 2026, with improvements in both our direct operating costs and our overhead expenses as a percent of revenue. Within our direct operating costs, improvement in our salaries, wages and benefits as a percent of revenue more than offset an increase in our operating supplies and expenses. Our team has continued to leverage the quality of our revenue growth, while also operating very efficiently to support this improvement. The increase in our operating supplies and expenses as a percent of revenue was primarily due to the increase in the cost of diesel fuel and other petroleum-based products.

The improvement in our overhead cost as a percent of revenue was primarily due to the overall decrease in our depreciation expense that's attributable to the decrease in size of our fleet as compared to last year. With that said, we are confident that we have -- that we continue to have plenty of service center and equipment capacity to accommodate additional growth opportunities. The improvement in our overhead costs also reflects the leverage gain from our revenue growth as well as a continued focus on controlling our discretionary spending.

Old Dominion's cash flow from operations totaled $469.5 million for the third quarter and $1.1 billion for the first 9 months of 2026, respectively, while capital expenditures were $67.1 million and $206.7 million for those same periods. We utilized $160.9 million and $400.6 million of cash for our share repurchase program during the third quarter and the first 9 months 2026, respectively, while our cash dividends totaled $60.0 million and $180.7 million for those same periods. Our effective tax rate for the third quarter of 2026 was 24.5% as compared to 24.8% in the third quarter of 2025. We currently expect our effective tax rate to be 24.8% for the fourth quarter of 2026.

This concludes our prepared remarks this morning. Operator, we'll be happy to open the floor for questions at this time.

Operator

[Operator Instructions] Our first question comes from Chris Wetherbee with Wells Fargo.

질의응답

Christian Wetherbee

I guess maybe we could start off with some thoughts around maybe operating ratio progression as we think about the fourth quarter. in the context of what sounds like it's maybe a little bit better than normal seasonality from a revenue standpoint for the fourth quarter. Can you maybe just help us sort of bridge that gap?

Adam Satterfield

Yes, sure. So normally, the operating ratio, we have a sequential increase of about 200 to 250 basis points, at least that's the 10-year average change and that excludes any impact from the annual actuarial analysis that we conduct in the fourth quarter of each year. I always look at that as just a reconciling item to whatever we give for our guidance there.

Based on what we've seen in October so far, I'm anticipating a few cost headwinds. But I still think that the low end of that normal range is appropriate for a target if our revenue trends continue to hold steady, and we continue to outperform seasonality there from a top line standpoint. So that would put us at around 7.5% for the quarter. overall, but I would add a plus or minus 20 basis points to maybe give us a little flexibility. So above seasonality top line and kind of at the low end of our seasonality from an operating ratio standpoint or maybe even slightly better.

Operator

The next question comes from Scott Group with Wolfe Research.

Scott Group

Adam, can you give us a little bit more color on some of the revenue trends. So we got tonnage. Can you help us maybe break down the yield trend in October with fuel without fuel and just the -- it sounds like revenues better than normal seasonality, just give us -- how is tonnage trending relative to normal as well, if you can?

Adam Satterfield

Yes. The -- so like I said, the tons are up at least month-to-date, 1.6%. And so that would imply that the revenue per hundredweight with fuel is right around 20% without fuel was between 5.5% to 6%. And some of that -- it's still very strong. It's a little bit below where we were in August. But I think that just slightly, but what we've seen is a further acceleration in our weight per shipment. So to keep that revenue per hundredweight ex fuel pretty steady there, I think, shows the continued strength our pricing philosophy and what we've been able to achieve.

It also does reflect our general rate increase went into effect at the first of October this year versus the first of November last year. So continuation of good trends, like we said, demand continues to remain stable. And we'll look for continued revenue growth in the -- quality revenue growth in the fourth quarter as a result.

Operator

The next question comes from Tom Wadewitz with UBS.

Thomas Wadewitz

I wanted to get your thoughts on comp and benefits expense. I think you've had -- I want to see you talked about, Adam, maybe group life and some, I guess, fringe type of pressures. But what does that look like in 3Q. And is there an element that is incentive comp? Or just what are the big pieces that are driving that up? And then how do you look at that kind of 4Q or go forward?

Adam Satterfield

Yes. So if you just look at the total compensation, salaries, wages and benefits on a per employee basis, we continue to see that up on a year-over-year basis. And the majority of that is related to the increase that we continue to see in our fringe benefit cost. We also have increased performance-based compensation. Obviously, we gave a wage increase. That was between 3% to 3.5%. And then just our people are working more hours.

If you look overall, our average head count in the third quarter was down 4% comparing favorably to the 2% decrease in shipments per day. So all those factors kind of contribute, but a lot of that increase in the per employee cost is really coming from the fringe benefits. And that was something that we talked about at the end of the second quarter call that we anticipated that, that would be further pressure on our costs in the third quarter, and they were. They came in actually a little bit higher than what I had originally anticipated.

So we generally talk about that fringe benefit as a percent of our salaries and wages, and that came in, in the third quarter at 42.8%. Third quarter last year was 39.7%. So that's about a full operating point headwind just based on those costs. And based on -- it's mainly been driven by our health and dental costs. And that's just something that I think overall, not just us, but the entire medical inflation has been pretty significant the last couple of years. And based on what I'm seeing in October, we'd expect that, that's going to be potentially a headwind in the fourth quarter as well. But that's based in -- or baked into the operating ratio guidance that we gave.

Thomas Wadewitz

Okay. But do you think kind of the type of pressure you're seeing, I guess, obviously, wage is going to be impact, but like the magnitude of pressure from fringe and from incentive comp that's probably similar in 4Q to kind of what you saw in 3Q?

Adam Satterfield

I think so. I think that that's something that don't really see changing much and especially with respect to the fringe cost. But obviously, we continue to manage all of our costs really. But I think looking at the sequential change from 3Q to 4Q, a lot of that normal 200 to 250 basis point progression is in salaries, wages and benefits and then op supplies and expenses. And you may see a little bit of a variance.

We've obviously got -- it looks like based on October, some fuel cost pressure. So you might see that those 2 line items combined, I expect them to trend about an average, but probably what normally is more of an increase in salaries, wages and benefits as a percent of revenue. You're probably going to see that more of an increase in our op supplies and expenses and just the reverse, the salaries, wages and benefits as a percent of revenue will probably outperform on a similar basis relative to what our 10-year average change would be. And that's all as a percent of revenue.

Operator

The next question comes from Jason Seidel with TD Cowen.

Jason Seidl

Adam, just one a clarification question and then a question about drivers. You said you have basically plenty of capacity at your service centers. Can you put a number around the excess capacity to sort of give us a feel for the progression.

And then two, when you look at the driver market, I mean it's clear that at least on the truckload side of things, it's been tightening and tightening in terms of qualified drivers. Now I know there's not always a direct overlap, but there's always an indirect impact on LTL drivers, especially as we think about wages going forward into '27 and beyond, maybe you could talk to expectations there.

Adam Satterfield

Yes. Well, first, the spare capacity number that we generally talk about is really just on the real estate side, and that number continues to be north of 35%. So we're in great shape when it comes to real estate capacity. We're in great shape when it comes to equipment capacity as well. We've trimmed the fleet back a little bit, as mentioned earlier and that's helped us from an overall depreciation standpoint, the depreciation dollars were down actually on an absolute basis in the third quarter versus third quarter of last year. But we continue to have plenty of power and trailing equipment capacity.

From a [indiscernible] capacity standpoint, I think we're in great shape there as well. Our head count has been pretty flat all year. somewhere a little over 20,000 full-time employees. And if you think about where we are from a volume standpoint in the third quarter versus where we were in the first quarter, we've been able to keep our head count steady and our volumes are up 5%, 6% if you compare just those 2 quarterly periods. So we've been kind of holding steady all year there. But that's intentional, and that's always part of our strategy as we try to keep our people employed and keep as many drivers as we can to make sure when we come out on the other side, we've got plenty of capacity there.

So hours worked had been trending back a little bit on average. And now you're starting to see some of those step up. And like I mentioned earlier, that's why the average wage per employee is up a little bit as we're just seeing more hours worked on average. But we've got plenty of capacity to be able to step up. We've got drivers in some cases that are trained to have their CDL that they're working on the platform, and we can put them right back in the truck when dictated. We continue to take advantage of our truck driving schools. We produce the majority of our own drivers internally. We train them internally. So that's a big benefit for us.

And when demand dictates, we can always go to the market. But where we've needed to hire, you may have some spotty issues here and there. But overall, given the culture that we have and the quality of wage, generally paying a wage at the top of the industry, we've not had any major issues attracting employees when drivers when we've needed them.

Kevin Freeman

Jason, also keep in mind that LTL versus truckload, our turnover ratio is less than [indiscernible]. Full truckload, it's probably in your high 90s to 100% turnover. So but we're not having any issues hiring drivers when we need them.

Jason Seidl

That's good to hear. And Adam, just to follow up on your comments there about sort of the fleet. So if we just have normalized growth into '27, should we expect sort of an increase in CapEx as we move throughout '27 for purchases?

Adam Satterfield

Well, we haven't finalized that at this point yet. We're in a few weeks, we'll be going through our annual strategic planning process to really fine-tune what our plan for next year will be. But I would anticipate, just like we saw this year, that will likely -- our total CapEx will likely be lower than the 10% to 15% of revenue spend that we typically see just based on the size of the fleet that we can grow into.

But of course, we're going to -- we have a normal replacement cycle that we go through every year and then we'll continue to have and evaluate real estate opportunities that's on the scale that we look at what's our growth potential look like not just next year, but what does our market share look like over the next 10 years. And we've been the biggest market share winner over the past 10 years, and I'm confident that we'll be the biggest market share winner over the next 10.

So it's always about where are the right places to add real estate capacity along that spectrum of growth that we would anticipate seeing. And when does it make sense to add it? When do you get the opportunity in some high-demand markets evaluating all those things that will go into the real estate strategy when we think about '27.

Jason Seidl

Gentlemen, that's great color. Appreciate it, and nice job in the quarter.

Operator

The next question comes from Jordan Alliger with Goldman Sachs.

Jordan Alliger

I just wanted to come back. I know I think you mentioned demand seems fairly stable. It reflected positive, which is certainly good news. So maybe just share some thoughts on the overall tenor of demand other than maybe comping against easy comps, as weight per shipment still being positive a couple of percent for a few quarters? Are we indicative of that maybe a true firmer market is upon us?

Adam Satterfield

Yes. The weight per shipment, that's continued to be positive, and I don't know if I gave a number, but in October, the weight per shipment is up about 3% compared to October of last year. So we continue to see that flexing up. And that generally is a positive indicator for demand I think that just based on customer conversations that we've had throughout the year, but even recently, we just continued to see stable demand trends and feel like that potential is there.

Obviously, there's a lot going on in the world and with the broad economy that our customers are managing through when they think about inventory trends and whatnot. But that's something that we just continue to stay in front of. We feel like we're seeing some good market share opportunities as we go through bids and sands, seeing customers asking about multiyear contracts. Things that when you read the tea leaves are more indicative of an improving demand environment. And obviously, we've continued to see the industrial economy with positive through the year, it's been in kind of the low to mid-50s, but it's been an expansion territory. So that's been good.

So other macro figures that continue to be positive but just balancing those with customer conversations. We've been above seasonality when you think broadly about it. all year. And certainly, we've seen some months that have -- when you look more granular, some months have been above seasonality, some months below. October tonnage is below what the normal seasonality is, but I fully expect just based on the broader trend that we'll continue to see kind of that up down, up, down trend that we've seen throughout the year and think that as we go through November and December that we can see that trend being above seasonality.

Operator

And the next question comes from Brian Ossenbeck with JPMorgan.

Brian Ossenbeck

Just the kind of the 2-parter here. I wanted to hear a little bit more about the GRI stick rate, obviously, another great year in Mastio with high value for high service. So I want to see how that's being accepted, I guess, in the current market? And are you seeing any benefit from truckload spillover? Obviously, rate has been up for a while now. So I would expect that there is something in there that you might be seeing at this point?

And then just maybe to wrap it up, just a broader commentary on density and the network, how to think about incremental margins as we start to see, hopefully, a more continued rate of volume and tonnage and shipment improvement.

Adam Satterfield

Yes, there was a lot in there to try to unpack. But maybe I'll leave the last one for someone else. But I'd say from a GRI standpoint, we have a pretty simple philosophy of being cost based. And when you think back over time, we generally target getting around a 5% increase, and our GRI has been 4.9%. That's been pretty consistent year in and year out for about as long as I can remember.

So I think when you've got a simple strategy like that, it's pretty effective to be able to go in and sit across the table and asked for an increase to help offset the cost inflation that we're seeing in our business. And frankly, in the third quarter, at least, cost inflation when you look on a per shipment basis, has been trending higher than what we anticipated. We thought core inflation would be 5% to 5.5% this year, and we've seen that trending a bit higher.

But -- so that's been steady. I think that supports when you look at our overall revenue per hundredweight excluding fuel and the full quarter was at 5.1% revenue per shipment, which is really how I think about revenue per shipment and cost per shipment has been trending higher, but some of that reflects the fact that we're seeing higher weight per shipment. Our length of haul was a little bit higher in the third quarter as well.

So all of those are favorable and lead ultimately to long-term operating ratio improvement. So those have been good trends to continue to see, and we'd expect to see that same type of consistency as we move forward.

Operator

The next question comes from Eric Morgan with Barclays.

Eric Morgan

I guess I'll just ask one on fuel. I was curious if there is a lag impact in the third quarter that maybe you could quantify, I don't know if that presents a tailwind sequentially in 4Q. I think the surcharge as a percent of base revenue moved down a little from 2Q, even though I think diesel prices were higher. So just curious how to think about any catch-up in 4Q and that's baked into the margin guidance?

Adam Satterfield

Yes. Our surcharge program resets every week. So there's always a little bit of lag effect there, if you will. And certainly, that is baked into the guidance that we gave for the fourth quarter, both from a revenue standpoint and margin standpoint. And it looks like it continues to be a fuel prices continue to be elevated. And I think that's something that we need to see come down, and that's what we're hoping for. At some point, we've got to have some resolution on this to help the broad economy.

But I think that the way we talk about the surcharge is we -- most of our large contractual customers, they give us the fuel scale that we have built our rates around. And surcharge just becomes a variable component of pricing. And in a perfect world, whether it goes up or it goes down, we've got the same type of profit contribution regardless. And I know there's some broad concern about the fuel, and I've given some of these examples before. But for example, in the -- from the fourth quarter of '25 to the first quarter of this year, fuel sequentially went up 10%. Our fuel count, our shipments per day, those were consistent between those 2 quarterly periods, and our profitability was consistent. So it worked in that regard.

But I think there's some broad concern that read out there about when fuel eventually unwinds. And I guess I would point people back to 2015, that's at least in the past 15 years, the last period where we had the biggest change in fuel price per gallon that year was down 29%. We had good tonnage growth that year. We still produced about 6.5% revenue growth and our earnings per share are up 15% that year. So I think those are a couple of the broader examples where the variability in fuel, if we've done our job appropriately in terms of how we've priced out and built our base rates, we can see that come down and be just fine from an overall profitability standpoint.

Operator

The next question comes from Jonathan Chappell with Evercore ISI.

Jonathan Chappell

Adam, I just want to go back on something you noted earlier. I know we've talked about salaries, wages and benefits. I know you talked about operating supplies, we've even spoken about fuel. But if revenue is going to come in above normal seasonality, yield ex fuel, up 5.5% to 6%, which is a great number like you said, only maybe [indiscernible] worse in August, but otherwise really strong. Why would the OR still be at the low end of the range?

You mentioned a few cost headwinds you're expecting in 4Q? Is that just fuel, which conceivably should be offset with the fuel surcharge mechanism? Or is there something else that's kind of timing or more just kind of inflationary pressure where the OR shouldn't also be following the revenue down a path of better-than-normal seasonality?

Adam Satterfield

Yes. I mean, look, we'd love for it to come in better than seasonality, but that is one thing. I mean, obviously, we're going to have overall inflation that we'll continue to see from fuel prices being higher. And some of that comes through and other things that you don't just think about. And we've seen increased prices in practically anything that's petroleum based, but there are some other costs that are revenue driven more than anything that could be in G&A or miscellaneous expenses and so forth that will also continue to be elevated because of the overall revenue level.

So look, we're going to continue to work hard and produce the best operating ratio and profits that we can. But I think that we're looking at with the implied guidance that we gave, incremental margins in about the 45% range. And so we think about where our cost structure is our cost structure from an overall standpoint, if I look at the third quarter, our direct variable costs were about 51%. When you go back to the third quarter of 2022, they were about 52.5% then. So we're about 150 basis points better from a direct variable cost standpoint than we were at a period where we had our best operating ratio ever at 69.1%.

So we've got tremendous leverage that we'll continue to take advantage of from an overhead cost standpoint as we continue to grow our revenues. And we've got continued opportunity from a direct variable cost standpoint as well when you think broadly, but just going quarter-to-quarter, typically, you there's 10-year averages for a reason. It's the average type of change, and we'll see where the way it ultimately lands and the overall revenue and so forth and how we continue to manage all of those direct costs as a percent of revenue. But I can tell you, we're working hard every day to manage every element of cost that we can to produce the best operating ratio that we can't.

Operator

And the next question comes from Ravi Shanker with Morgan Stanley.

Ravi Shanker

I want to follow up on your commentary on the fleet and the [indiscernible] capacity. It's a little bit [indiscernible] to reduce the size of your fleet when you're sitting on 35% excess doors here, especially [indiscernible] running in the mid-50s, which most people would say is like a decent, if not gangbusters type environment. Can you just help unpack that and kind of [indiscernible] message on what do you think happens to demand over the next 2 or 3 quarters? Because if you have that much excess capacity and things are getting better, I'm surprised that you're reducing the size of the fleet.

Adam Satterfield

Well, just going back to each of the elements of capacity, if you think about where we are from a shipments per day standpoint, the amount of door capacity that we have I think we're in really great shape there. I mentioned we've got north of 35%. So we can grow into the network that we have from a service center and a door capacity standpoint. And that's not to say, and like I mentioned earlier, we're continuing to look at kind of where we are and where we think we can get to when you look over the next 5 or 10 years and kind of look through the current cycle, but just continue to think big picture where our industry is and where we are within it.

But just looking broadly at the number of tractors that we have we didn't have a major decrease in the size of our fleet. But we've continued to spend pretty aggressively over the last 3 years that we've been in this freight recession and had built our fleet size up quite a bit, and we've just been selectively reducing it. That's one of the things you don't want to be shortsighted and try to match exactly your tractor count and your trailing equipment account on a pure per shipment handle basis or per service center kind of metric because you could end up over reducing your fleet and then having to come right back in and purchase even more equipment. And every year, we go through the cost of new power equipment in particular continues to accelerate pretty aggressively.

So we're not doing anything other than just strategically trimming around the edges, if you will, but making sure that we've got plenty of power equipment and trailing equipment in place to accommodate the needs of our customers. So we're not concerned in any way about overdoing it as we manage the fleet and manage related expenses. But having an extra piece of power equipment is expensive to maintain. You've got maintenance on it. You've got taxes efficiencies and so forth. And so that's something that we're pretty strategic about.

Operator

And the next question comes from Richa Harnain with Deutsche Bank.

Richa Talwar

So I wanted to go back on the October tons being up 1.6%, I don't think it was said why it was up from a monthly sequential perspective, and if it did underperform, it seems like it might have, what do you think is likely rationale? And I know September was a solid month relative to normal seasonality. So I guess what's it going to take, do you think, to get us out of the sort of uneven recovery we've had so far year-to-date despite ISM manufacturing continuing to be solidly over 50.

Adam Satterfield

Well, I mean, I think that for us, the September change in tons per day was up 3.9%. The 10-year average is 3.1%. In October, 10-year average is down about 3.5%. And right now, we're trending down about a little over -- between 5% and 5.5%. And so -- but kind of what I mentioned earlier in the previous question is month-over-month, we've had 1 month where we've outperformed and then 1 the next month that we've underperformed.

But broadly speaking, if you look for the quarters and even if you just go back to the first of the year, we've been exceeding overall seasonality all year. And so that's something that I think demonstrates the success within our industrial book of business, industrials, 55% to 60% of our revenue. And so we've had good performance there. We continue to have really strong performance with our retail-related customers as well, and that's something that our retail has probably outperformed the company average. And some of that reflects some pretty unique market share gains that we've had some really significant growth with a few really large accounts as they've given us an increased share of their wallet spend on LTL.

So I think it's a multitude of factors. And while it's not come in completely in alignment with what the 10-year average change by month is, broadly speaking, we just continue to see things as positive and try not to get too hung up on what 1 month relative to the 10-year would be. Same type of thing happened in April, where we started out about 200 basis points under what seasonality for the month was, and we basically brought the full quarter back to what normal seasonality would be for tons.

So -- but I think, like I mentioned in the previous response is we continue to get good feedback from customers we're seeing success and bids that we're participating in. But we also hear some feedback as well that there continues to be some broad concerns about inflation and the consumer that's probably holding some things back from just completely taking off like I think they could be. And that's why we say we continue to think that there's got to be some improvement in the overall fuel environment to take some of that concern that some shippers have about the consumer away and to where we can really see things take off and have gangbusters type of growth.

Operator

And the next question comes from Bascome Majors with Stephens Inc.

Bascome Majors

Adam, you talked earlier about seeing some good results in some of your bids. I think you even mentioned multiyear contracts, which I don't think we've heard much about an LTL before. Can you go into a little more? And maybe as part of that, the decision to add to net head count sequentially after really managing the super seasonality with hours in the first half of the year, how much of that is protecting service in the network today? And how much of that is getting ahead of growth tomorrow?

Adam Satterfield

Yes. From a head count standpoint, really it's been pretty steady all year. I mean, from a -- go back to January through September, you'll have some months that our full-time head count can be up or down slightly, but it's been pretty steady as she goes all year. And some of that, though, could reflect. We've got some service centers that are seeing really strong growth. And so you've got to add in some places.

And then you've always just got a balance the number of hours that are being worked on average for your people in 1 particular location and knowing and understanding what opportunities that are there at any one of our 261 service centers and to make sure that you've got the appropriate number of people to not only accommodate managing what we have today, but what we think may be coming to us tomorrow.

Now with all that said, I think where our head count is, I don't really see any type of material change as we go through the fourth quarter seasonally fourth quarter and 1Q is a little bit slower. And so I would expect that we'll see consistency with our team and no major change there. unless we see a major change coming from an overall demand standpoint. But I think we can accommodate what we would see from now through early spring and easily handle that with the number of people that we have in place across the U.S.

Kevin Freeman

Bascome multiyear contracts have been around for a long time. I think some of your larger customers that we see come in here for negotiations are seeing the future bright. So they want to go ahead and negotiate their rates upfront. So that there -- when there is an inflection in the economy, you don't take a 4% rate increase this year and 10% next year. So they want to negotiate that now foreseeing that could happen in the inflection in the economy. So it's really nothing new. It's been around for a while.

Bascome Majors

Just the terms of that typical contract, do they specify pricing and not volume? Is there some flexibility on both? Can you just give us a sense of what you're committing to and what the customer is committing to when you do sign up for 2, 3 years at a time?

Kevin Freeman

Yes. It's prevalent for a 2-year contract, not really beyond that. We don't like to negotiate beyond the 2-year. But it's basically based on base rate increases and not really volume increases.

Adam Satterfield

Just the contracted term, Bascome. So there's no volume commitments in there. But obviously, it's built around understanding what lanes we'd be awarded and whatnot. But that's just another indicator point like Marty said that another kind of point of positivity, if you want to call it, that people are trying to get ahead of some things that they foresee changing in the space overall and perhaps with competitor behavior and so forth.

Operator

And the next question comes from Ari Rosa with Citigroup.

Ariel Rosa

So I wanted to kind of continue on Bascome's line of questioning. Just on the subject of somewhat more constructive customer conversations. I was hoping you could speak to what might have changed in the environment that's driving that? And as we think about kind of taking a step back, volumes have been under pressure now for several years at least. How should we think about the opportunity to kind of get back to growth, get back to that trajectory that we're used to seeing from OD of kind of taking share. Adam, I think you spoke about a lot of confidence on continuing to win share over kind of a 10-year period. But kind of as we think about the next 1 to 2 years, how should we think about kind of the opportunity to do that in a meaningful way? And what would drive that beyond just kind of a macro inflection?

Adam Satterfield

Well, at the end of the day, service is what wins share in our industry and as indicated by the most recent Mastio analysis, it's our 17th straight year of winning that award being the #1 national LTL carrier and the gap is bigger than it's ever been. And so I think that's some of the feedback that we've heard this year is that some competitors have got increasingly have had some service issues. So that's something that I think continues to play in our favor. We've got a stronger value proposition than anyone in the space. And I think that's ultimately why we're confident that we'll continue to win more market share than anyone.

The other piece of that, though, is having capacity. And while capacity has not really been at the forefront, many shippers' minds perhaps the last couple of years that overall demand has been lackluster. That is something that we're hearing come into play a little more, especially when it comes to equipment and driver availability. And by trying to keep cost as low as they possibly can. I think that that's leading to some competitors that are struggling to make consistent pickups. And so when customers need to make sure the freights picked up and delivered when promised. They know who they can call on for that.

So those are the factors that I think will continue to support our ability to win more market share than anyone else. And I don't really foresee that capacity piece when we look at some capacity metrics of shipments per day per service center. There's a lot of similarity for where some of our competitors are at the end of 2025, similar to where they were in 2022. So we continue to see a capacity-constrained industry, but an industry overall that's got favorable tailwinds for it. And so sitting as the carrier that's got better service and a tremendous amount of capacity, those are the main factors that support why we believe we'll be the biggest market share win over the next 10 years.

Kevin Freeman

Ari, we're also -- as we said earlier, we're also seeing an increase in our weight per shipment. And that basically means that customers are putting more widgets on a pallet. And we think some of that is coming from the full truckload industry that's having capacity constraints at the moment. So I think that's where some of that is coming from as well.

Operator

The next question comes from Stephanie Moore with Jefferies.

Stephanie Benjamin Moore

Maybe as I think about long term, your strategy as it relates to the 3PL [indiscernible], I just think given the capacity you have in the network today, is there an opportunity to maybe be a bit more flexible in using 3PLs. We'd love just to get some updated thoughts there?

Kevin Freeman

Stephanie, if you're talking about dynamic or transactional type pricing, the answer to that is no. 95% of what we do with 3PLs is basically contract business per customer, so we can look at their handling characteristics and so forth. So -- but yes, we have -- as I said earlier on earlier calls, we have 3PLs in here every week. So far this week, we've had 2 large ones. and they're in here discussing long-term contractual business, which we like better. It operates better for us as well.

Operator

The next question comes from Ken Hoexter with Bank of America.

Ken Hoexter

Adam, just a follow-up on your last answer to Ari, just the you gave a balanced econ view yet you're guiding unseasonal revenue jump and improving weight per shipment, as Marty just mentioned, but hearing that regional capacity pressures, is that popping up as for why the unseasonable revenue jump?

And then you mentioned data centers as a driver. Obviously, we hear about that for ISM. What participation does the sector, the LTL sector play in terms of data centers? Or is there not much and that's why given that's really kind of been a big driver, that's why you're not seeing much of the growth slow down to the sector?

Adam Satterfield

Yes, I think that -- well, a couple of things. I mean all year, we've seen, as we've talked about, our volumes be above seasonality. And so we want to see continued strong volume performance as we go through 4Q and October benefits a little bit, that 22% revenue growth that we're seeing benefits a little bit by having the GRI in there 1 month earlier than last year. But I think just overall reflects the consistency and strength that we've continued to see with our pricing this year and continuing to win business. So all of that kind of goes into the rev guide being above seasonal.

And from an overall data center and AI infrastructure build out, it's hard to put a number on it, the size and scale of many of those facilities. I think a lot of that freight is maybe ending up on flat beds and some other sectors. But A lot of that freight is very high value and it's something that we can serve. And in some cases, we are serving and being able to handle. We've -- based on the quality of our service and these very high-value goods. That's something where shippers can trust that we'll deliver that freight, get it in there. And I think a lot of that is very time sensitive as well, not just the security based on the value of product. But that is some incremental opportunity, I think, for the -- for us, in particular.

Operator

The next question comes from David Vernon with Bernstein.

David Vernon

Long-time listener, first-time caller. I appreciate you taking the question here. As you think about the capacity for the industry in itself, you mentioned earlier some competitors having trouble making pickups, maybe some volume bleeding in [indiscernible] like opportunities, things like that. If you just step back and think about the constraints the industry might have dealing with more volume if and when it shows up. Does it come down to drivers, does it come down the dock labor, does it come down to real estate? Like where do you think the real advantage we have in terms of being able to spool up the network is relative to the rest of the LTL industry?

Adam Satterfield

I mean really, it's all of the above. I think that service and capacity generally for the industry is tight. It was before yellow closed their doors in '23. And I think it remains tight to this day. when you think about the number of service centers that have left the market overall and the overall volume environment net-net has been down since '22, but I think that when looking at the allocation of real estate capacity, I don't see that, that would be something that is going to materially change from now going forward because I don't know that adding new service centers is incredibly expensive and we've got returns on invested capital of 25% to 30%.

So we've done our due diligence from a capital allocation standpoint, where we've added capacity and making sure that we get an appropriate return. And I think that the lack of return for some of the other carriers in the industry was probably part of the reason why practically every other carrier had shrunk their service center network overall in the 10 years leading up to that event in 2023. So I think that will be something that will continue to be more of a longer-term advantage for us.

But I think the other challenge in the short run is generally more confined by labor capacity. And we're fortunate that we're operating where we are that we can maintain excess labor capacity as we discussed earlier. But I think that for some of our competitors, at least the publicly traded competitor group on average, operated in the second quarter at about 90%. And so if you operate in a 90%, even with tonnage growth probably got some other issues, and you're probably trying to manage costs in a little different way. And most carriers, at least for us, 65% of our total costs are salaries, wages and benefits.

And so that comes the element that you try to trim back as tightly as you can. And so I think that's the reason why you hear service disruptions and missed pickups, it's generally a lack of labor capacity in the short run.

David Vernon

And is the frequency of those comments from customers changed since the second quarter? Has it just been kind of consistent. You mentioned that you'd expect to pick up a lot if volumes got a little stronger. I'm just wondering if that has us followed through.

Adam Satterfield

Well, I think it's been pretty steady all year, but I think that's something that is generally the industry was busier in the third quarter than the second. Any incremental shipment is probably putting more pressure on some of those that maybe have labor or equipment constraints. And so it probably picked up a little bit. And it's probably evidence too. And the Mastio results. I think a few of the carriers went backwards, if you will. So some of that all comes into play the feedback that we might hear through our sales team and from customers directly kind of manifest itself and what those results often look like.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Marty Freeman for any closing remarks.

Kevin Freeman

Thank you all today for your participation. We appreciate your questions, and please feel free to give us a call if you have anything further. Thanks, and I hope you have a great day.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.