In the third quarter, Pacer International experienced a jump in income from operations of more than $2 million compared to the same period last year, but saw a $98.9-million decline in revenues, year over year, due to a Mexican cross-border agreement with Union Pacific.
While this new agreement reduced revenues because Pacer no longer collects rail transportation costs, the deal also helped reduce Pacer’s cost of purchased transportation in the third quarter by $99 million, year over year.
Intermodal income rose by $2.6 million, while the company’s loss on the logistics side of its business decreased to $0.6 million.
“We continue to see improved operating results in our intermodal segment from the efforts we have taken to further lower our network costs through better management of our empty miles, network flows and box utilization,” Daniel Avramovich, Pacer’s chairman and chief executive officer, said in a statement. “Our logistics segment, while not yet profitable, has improved significantly over the last four quarters.”
The company reaffirmed its 2013 revenue guidance of between $1 billion and $1.1 billion.