First-Half Operating Backdrop Remained Healthy for Knight-Swift but Expect Normalization

Before its 2017 merger with Swift Transportation, Knight Transportation was the 12th-largest asset-based full-truckload carrier in the United States, with a history of exceptional execution, including average ROICs in the low-teens--an unusual accomplishment in trucking. Knight's long-standing laser focus on network efficiency has served it well given the asset-intensive nature of trucking. Its legacy operating ratio (expenses/revenue, excluding fuel surcharges) averaged in the mid-80% range before the Swift deal, versus an industry average that traditionally exceeds 90%.