Covenant Targets 75%–80% of Expedited Capacity for Dedicated Work.

Covenant Logistics Group, Inc. is targeting dedicated arrangements for 75%–80% of its Expedited capacity by year-end, backed by multiyear contracts as it seeks to make its business model more durable.

Some portfolio business could reach operating ratios in the 80s, management said, with around 85% or lower representing a stronger result. An operating ratio measures operating expenses as a share of revenue, so a lower ratio is better. Management did not say that level applied to the entire Expedited segment.

Covenant expects Transport Enterprise Leasing (TEL) to generate $3.7 million to $4 million in fourth-quarter pretax income. It also expects modest sequential growth in earnings per share as truckload margins improve, with lower TEL income partly offsetting that improvement.

A larger-than-usual fleet reassignment pressured truckload margins. Managed Freight margins offset some of that impact. Management also flagged driver cost inflation and volatility in insurance and claims.