Universal Logistics blames falling demand for weak first quarter

Transportation and supply chain provider Universal Logistics Holdings said lagging demand for auto parts contributed to a sluggish first quarter.

Universal Logistics’ (NASDAQ: ULH) first-quarter operating revenue decreased 22.3% year over year to $382.4 million. First-quarter earnings per share came in at 23 cents per share, an 88% year-over-year decrease.

“The overall freight environment remained sluggish, and our largest vertical, automotive, saw a slowdown in January but improved as the quarter progressed,” CEO Tim Phillips said during a call with analysts Friday. “While the results of this quarter were below our historical benchmarks, we remain confident in the resilience of our business model.”

The company released first-quarter financial results after the market closed on Thursday.

Universal Logistics is a Warren, Michigan-based truckload transportation, intermodal and logistics provider. The company provides services across the U.S, Mexico, Canada and Colombia and has more than 10,000 employees.

Universal Logistics missed Wall Street analysts’ revenue estimates of $454.1 million in the fourth quarter and earnings per share expectations of $1.04.

The company’s first-quarter results showed year-over-year decreases in its trucking, contract logistics, intermodal and managed brokerage segments.

CFO Jude Beres said the year got off to a slow start.

“In January of this year, Universal experienced its first loss ever in a January. We went into February 5 cents in the hole, losing 5 cents of earnings per share,” Beres said. “Then the quarter slowly got better. We went from negative 5 cents a share in January to positive 9 cents a share in February, and then 19 cents a share in March. So the quarter really started out low and the business really rebounded well.”

Universal’s contract logistics segment, including value-added and dedicated services, posted first-quarter revenue of $255.9 million, a decrease of 18.4% year over year from the same quarter in 2024.

By the end of the first quarter, Universal Logistics managed 87 value-added programs, including 20 rail terminal operations, compared to a total of 71 programs at the end of the same period in 2024.

“We have three key launches in contract logistics that will begin in the second quarter,” Phillips said. “These launches will increase our contract logistics annual revenue by 50 million per year.”

Universal’s trucking segment decreased 20.2% year over year to $55.6 million. During the first quarter, Universal moved 28,622 loads compared to 41,691 loads during the same period last year, a 31% decline. 

“We continue to see strong demand in our specialized heavy-haul window operation, which remains a strategic differentiator and a stabilizing force for this segment,” Phillips said. “Looking ahead, we expect this business to be a key contributor in 2025 especially as renewable energy infrastructure projects continue to move forward.”

The trucking segment’s average operating revenue per load, excluding fuel surcharges, increased 24% year over year to $1,874. The average number of Universal tractors decreased 22% year-over-year to 633.

Universal Logistics officials said while freight movements were slow in January, they rebounded in February, March and April.

“The quarter really started out low and the business really rebounded well,” Beres said. “For example, our cross-dock tonnage in February was up 30% from January, March’s cross-dock tonnage was up 64% from January. Auto production was up 29% in February compared to January, and then up 67.1% in March compared to January. If we just would have had an environment in January that was similar to February, the results would have looked a lot different. We would have definitely been within our guidance range of around $400 million in revenue and earnings of around 41 cents.”

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Vehicle Spotlight: 18 to 26 Foot Refrigerated Truck – CDL

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Borderlands Mexico: ILS boosts cross-border freight with Arizona facility

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: ILS boosts cross-border freight with Arizona facility; British wire harness maker plans new facility in Mexico; RK Logistics adds free trade zone warehouse space; and Texas border agents discover $8M worth of meth in shipment from Mexico.

ILS boosts cross-border freight with Arizona facility

The International Logistics Solutions (ILS) Co. continues to invest in U.S.-Mexico trade, regardless of the ups and downs of the White House’s current trade policies.

Earlier this month, ILS opened a 115,000-square-foot distribution center in Tucson, Arizona. The facility aims to serve industries that rely heavily on cross-border shipments between Mexico and the U.S., company officials said. 

“Our major customers are in the automotive and aerospace industries, and some industrial materials,” Tirzo Gortary, director of the ILS distribution center in Tucson, told FreightWaves in an interview. “We see a lot of our logistics parts either getting manufactured for or either delivered to GM, Tesla and Ford. Our customers are either customers that had manufacturing in the U.S. and in Mexico, or they could be suppliers that are outside of Mexico, outside of the U.S., that provide raw materials.”

The ILS Co., founded in 2002, is based in Tucson. The company is a logistics and supply chain management provider. In 2024, ILS’ import and export departments declared over $1.7 billion in shipments entering or leaving Mexico.

In addition to aerospace and automotive, ILS serves industries such as medical, construction, oil and gas, mining, renewable energy, and Mexico’s maquiladora businesses.

A maquiladora is a foreign-owned factory located near the U.S.-Mexico border that operates under a favorable duty- or tariff-free basis. The factory assembles imported goods for export, often to the U.S.

The ILS Company recently opened a 115,000-square-foot cross-border distribution center in Tucson, Arizona. (Photo: ILS)

The ILS Co. is also the logistics arm of Tetakawi, one of the largest providers of outsourcing solutions to firms that have manufacturing operations in Mexico.

“Our parent company is Tetakawi, one of the largest employers in [the Mexican state of] Sonora,” Gortary said. “They have manufacturing facilities in [the Mexican cities] of Guaymas, Empalme and Hermosillo. They work with companies that want to manufacture in Mexico or that have a contractor manufacturing in Mexico.”

Tucson is in the Arizona-Sonora trade corridor, a regional gateway for $32 billion worth of goods annually crossing between the U.S. and Mexico, according to a recent survey by the Arizona Department of Transportation.

Arizona has six commercial ports of entry along its border with Mexico, including Nogales, Lukeville, Sasabe, Douglas, San Luis and Naco.

Automotive suppliers in Sonora ship over 100,000 auto parts daily back and forth across the border with Arizona, according to The ILS Co.

Gortary said the Tucson distribution center aims to help clients by consolidating services in one facility.

“The facility is a cross-dock – it’s a consolidation point, basically, for imports and exports,” Gortary said. “For new inspections, we have on-site Mexican brokers. We have U.S. broker partners. Our customers are creating purchase orders that are coming from the U.S. manufacturers, Asian manufacturers, and they just happen to arrive in Tucson, and we just take care of all the logistics and getting them imported and into manufacturing facilities.”

British wire harness maker plans new facility in Mexico

Volex recently began construction of a manufacturing facility in San Luis Potosi, Mexico.

The United Kingdom-based company specializes in the manufacturing of wire harness assemblies. The plant will generate over 2,000 jobs, according to a news release.

Officials did not provide a timeline for the plant’s construction. San Luis Potosi is in central Mexico, about 450 miles from Laredo, Texas.

Volex has 28 manufacturing locations and a workforce of over 14,000 employees across 25 countries. The company is a supplier to industries such as industrial technology, consumer electricals, electric vehicles, medical and automotive.

RK Logistics adds free trade zone warehouse space

RK Logistics Group has expanded its customs bonded warehouse and foreign trade zone (FTZs) capacity at its facilities in California, Texas, Arizona, New York and Michigan.

The facilities boost RK Logistics’ service offerings, with the expanded FTZs allowing businesses to defer, reduce or eliminate customs duties, streamline operations, and optimize cash flow for goods entering domestic and international markets, according to a news release.

“This expansion underscores our commitment to supporting clients in a complex global trade landscape,” Joe MacLean, CEO of RK Logistics Group, said in a statement. 

RK Logistics Group, based in Fremont, California, is a 3PL that targets high-tech companies. The company has 17 facilities in five states totaling 1.7 million square feet of warehouse space.

Texas border agents discover $8M worth of meth in shipment from Mexico

U.S. Customs and Border Protection in South Texas recently intercepted $8.9 million in alleged methamphetamine concealed in a shipment of chayote from Mexico.

Packages containing 1,002-pounds of meth seized by CBP officers at Pharr-Reynosa International Bridge. (Photo: CBP)

Chayote is also known as vegetable pear and is a pear-shaped squash native to Mexico, according to a news release.

On April 13 at the Pharr-Reynosa International Bridge in Pharr, Texas, CBP officers searched a tractor-trailer arriving from Mexico. They found packages containing 1,002 pounds of methamphetamine hidden inside the shipment.

CBP seized the narcotics and vehicle and turned the case over to Homeland Security Investigations.

The post Borderlands Mexico: ILS boosts cross-border freight with Arizona facility appeared first on FreightWaves.

Plus completes driver-out autonomous truck testing

Autonomous trucking technology developer Plus has completed fully driverless testing at the Transportation Research Center (TRC) in Ohio, operating a truck with no one in the cab and demonstrating its […]

Watchdog calls out lax FMCSA oversight of $2B in grant money

WASHINGTON — The Federal Motor Carrier Safety Administration must do a better job of overseeing and keeping track of billions of dollars of taxpayer money aimed at preventing truck crashes, according to a government watchdog.

In an audit report released Friday on the agency’s Motor Carrier Safety Assistance Program grant program, the Transportation Department’s Office of Inspector General (OIG) revealed that FMCSA’s division offices do not always follow the agency’s MCSAP monitoring policies and procedures.

In site visits conducted between May 2023 and February 2025 at FMCSA division offices in four sample states – Arizona, California, Texas and Virginia – OIG auditors also found that the guidelines FMCSA provides its division offices for reviewing grant recipients’ MCSAP reimbursement requests are “insufficient and outdated.”

In addition, auditors concluded that FMCSA “faces challenges prioritizing Commercial Vehicle Safety Plan [CVSP] goals and performance tracking.”

The reason for the audit – and why the findings are so concerning – is that the Infrastructure Investment and Jobs Act, signed by then-President Joe Biden in November 2021, authorized over $2 billion in appropriations over five years for MCSAP state grants, along with $400 million in supplemental funds – a 61% increase over the previous five years.

“Because of this substantial increase in MCSAP grant funding and the importance of FMCSA oversight of state plans to reduce crashes and enforce commercial motor vehicle regulations, we initiated this audit,” the OIG stated.

“FMCSA reported that 5,176 fatalities involving large trucks and buses occurred in 2023. FMCSA needs to apply strong monitoring activities to verify funds are expended on eligible expenses that increase CMV [commercial motor vehicle] safety.”

To make the necessary oversight improvements, the OIG made five recommendations to FMCSA’s administrator (summarized):

  • Issue guidelines that clearly and comprehensively address MCSAP oversight responsibilities, including documentation and supervisory reviews of quarterly report monitoring.
  • Revise annual risk assessment guidelines to include an assessment of MCSAP-specific risks, emphasizing organizational management factors.
  • Develop and implement a process to notify FMCSA’s state programs division of grantees that receive a medium or high priority level from the annual risk assessment.
  • Revise monitoring plan guidelines to incorporate supervisory review and approvals of monitoring plans and verify plans are fully completed and include a rationale for any activities not completed.
  • Revise guidelines on the impact of CVSP goal performance for creating a clear line between the performance of CVSP goals and when to take enforcement action and urge division offices to document oversight of CVSP goals.

FMCSA told the OIG it planned to implement the five recommendations by Dec. 31.

Click for more FreightWaves articles by John Gallagher.

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