An ongoing freight recession weighed on Titanium Transportation Group’s Q1 earnings, even though it was able to grow volumes in its trucking and logistics businesses.

Titanium generated $115 in revenue in the quarter, up 8.3% year over year. However, its net income fell 81% to $681,000. Logistics revenue was flat year over year, while trucking revenue grew 15.5% as its U.S. acquisition of Crane Transportation began to contribute.

“Titanium had a strong start to 2024, delivering another profitable quarter, propelled by our first-ever US asset acquisition, strong performance of our truck transportation segment overall, and our prudent capital management strategy — despite persistent industry-wide challenges,” CEO Ted Daniel said in a release.  

“However, ongoing pricing pressures led to margin compression and reduced profitability during the quarter. Looking ahead in 2024, we remain focused on diversifying our customer base, leveraging the strength of our US-based footprint, utilizing proprietary technology to strategically allocate capacity, and continuing to deliver profitable growth.”

While the first quarter presented difficult operating conditions, Daniel said it’s a “necessary catalyst to drive excess capacity out of the market and restore more normalized pricing.”

The company reduced its 2024 guidance from $490 to $510 million in revenue, to $470 to $490 million.

On a conference call with analysts, Titanium executives said they are projecting a stronger second half to the year and are already seeing signs of a more balanced market emerging.

“We have seen some of that neutralized a little bit,” chief operating officer Marilyn Daniel said of the undercutting of rates. “A lot of carriers have hit bottom and the purge is already underway.”

She noted pricing discussions with shippers have neutralized of late in the current Request for Quote environment.

Titanium has grown its brokerage business by more than 22% in volume year over year, Ted Daniel noted, and still plans to add one or more U.S. locations before year-end. “That’s incredibly exciting. As soon as things turn, that’s going to explode,” he said of the asset-light division, where Titanium is planning most of its short-term growth.

Marilyn Daniel said the company anticipates seeing more capacity exit the market, even as customers are optimistic about increasing their volumes later this year. She added fleet failures are being seen broadly across the industry and are not limited to certain segments, regions or commodities.

“As we continue to see capacity exit the market, we believe we’re going to see a shift in the balance of the negotiations,” Ted Daniel said of discussions with customers. “There will come a time where it’s not going to be a race to the bottom on RFQs and there’s going to become a more balanced market.”

The integration of Crane Transportation continues, against the backdrop of a down market.

“It’s easier to integrate a company when you have tailwinds,” Ted Daniel said.

Asked if a potential rail strike in Canada would benefit the company, Marilyn Daniel said it’s unclear whether or not one will materialize, but the company has been working with customers to develop contingency plans.

“If there is going to be one, we are prepared for it,” she said. “We are prepared to take advantage of that situation as it arises, or if it arises.”