There are a couple of interesting numbers reflecting the freight business as truck stop operator TravelCenters of America Inc., (TA) Westlake, Ohio announced financial results for the three months ended March 31, 2020.
“Our fuel sales volume during the first quarter increased 3.6%, which was driven entirely by diesel fuel sales volume,” said Jonathan M. Pertchik, TA’s CEO. “Our gasoline sales volume, after being up most of the first quarter, declined significantly beginning mid-March as consumers responded to the COVID-19 pandemic. Despite the decrease in gasoline sales volume, total fuel gross margin was strong in March as both diesel fuel and gasoline costs declined as a result of reduced demand, which resulted in a 9.6% increase in our fuel gross margin for the 2020 first quarter.
“The strong fuel gross margin was more than offset by a decline in our nonfuel gross margin primarily due to the government-mandated stay at home orders and temporary closures of certain full service restaurants that were issued in mid-March, which affected the traffic at locations we operate. In addition to dealing with the effects of the COVID-19 pandemic, the results from our truck service and stores were largely impacted by unseasonably mild weather experienced in the 2020 first quarter as compared to extreme cold weather in the 2019 first quarter,” Pertchik said.
TA’s report also noted that fuel sales volume for the 2020 first quarter increased by 16.9 million gallons, or 3.6%, as compared to the 2019 first quarter due to the success of TA’s marketing initiatives and improved market conditions during the first two and one-half months of 2020, and the increase in trucking activity during the last two weeks of March 2020 as a result of the initial increase in demand for certain products as businesses and households stocked up on those products as the implications of the COVID-19 pandemic began to be widely understood.
Fuel revenues for the 2020 first quarter decreased by $108.2 million, or 11.0%, as compared to the 2019 first quarter. The decrease in fuel revenues was primarily due to a decrease in market prices for fuel, partially offset by an increase in fuel sales volume.