📉 Trucking Stocks Tank

Happy Earth Day. We hope you're thinking green even though a bunch of trucking stocks are seeing red. Today's feature takes a look at cooling stock prices as Q1 earnings reports from major carriers have sparked concerns.

🤔 Question of the Day: Which of these four publicly traded mega carriers has had the worst-performing share price in the last 30 days? Scroll to our main story to find out.

A. ArcBest
B. Forward Air
C. Knight-Swift
D. J.B. Hunt

TOP LANE MOVERS POWERED BY GREENSCREENS.AI

*Greenscreens.ai, forecasts real-time truckload buy prices that are suited to each freight brokerage's purchasing power using AI and machine learning. Its engine takes into account over 130 attributes and data points in each rate forecast.

🐔 WHAT’S COOKIN’ IN FREIGHT

⚡️Tesla Advances Electric Truck Corridor. Tesla continues to advance its plan to build an 1,800-mile electric truck charging corridor from Texas to California, named TESSERACT, despite not receiving federal funding under President Biden’s infrastructure plan. The project aims to link Tesla's North American factories and promote electric trucking, despite setbacks such as the company's recent restructuring and layoffs, and a focus shift towards autonomous driving and robotaxis. Tesla is exploring state funding and future federal opportunities to support the corridor, which could significantly impact long-distance and regional electric trucking.

🤝 FMCSA Approves Freight Broker Training Requirements. The Federal Motor Carrier Safety Administration (FMCSA) has approved the Transportation Intermediaries Association's (TIA) petition to enforce training requirements for brokers and freight forwarders. Despite increased fraud in the sector, highlighted by TIA, these measures aim to improve safety and integrity in the marketplace by ensuring that brokers employ individuals with either relevant experience or adequate training. Additionally, FMCSA is moving towards a new registration system and enhancing broker transparency, although specific rulemaking is still pending.

💡 Factoring Data Insights. Triumph Financial's TriumphPay segment experienced a setback with a negative EBITDA in the first quarter of 2024, marking a shift from its brief positive EBITDA in the previous quarter, despite the company's long-term strategy showing promise with notable client additions like Werner Enterprises. The broader trucking market remains sluggish, evidenced by minimal changes in average invoice sizes and weak earnings across the sector. However, TriumphPay continues to grow its influence in the brokered freight market, aiming to cover 50% of it by year's end.

TOGETHER WITH CTRL CHAIN

Celebrate Earth Day with a greener supply chain. See how leading companies are embracing sustainable options with CtrlChain, like offsetting carbon emissions.

This latest article explores the environmental strides being made in the freight industry, driven by consumer demand and automated tech.

Ready to reduce your carbon footprint and optimize your operations? Read on for more insights and solutions that benefit both your business and the planet. Make a change this Earth Day with CtrlChain.

Trucking Stocks Having a Bad Month

Although the freight market has been quite rough since mid-2022, that hasn't stopped investors from being bullish on trucking stocks. Many trucking stocks have enjoyed high prices, with several hitting share price records over the last couple of years. However, after last week's first-quarter reports from mega carriers, investor bullishness seems to be halting. Here is a one-month share price change of 12 publicly traded trucking companies:

One-Month Share Price Changes*

1. Forward Air: -18.42%
2. J.B. Hunt: -14%
3. Pam Transportation: -13.67%
4. SAIA: -11.68%
5. TFI: -10.3%
6. XPO: -8.7%
7. Knight-Swift: -8%
8. Landstar: -7.8%
9. Werner: -6.3%
10. Old Dominion: -3.95%
11. Schneider: -2.8%
12. ArcBest: +0.72%

*As of April 21, 2024, 21:29.

With the release of key earnings reports and sobering comments from J.B. Hunt President, Shelley Simpson, investor confidence wavered, hitting stock prices hard.

🎣 When Will It End?

Despite earlier optimism of a Q1 recovery, new numbers from industry leaders and other key performance indicators have sparked a wave of hesitation.

FreightCaviarAdriana Pulley

As we edge into Q2, the trucking industry still deals with the shadows of the freight recession.

These figures mirror investor worries about what lies ahead. Here's a closer look at the current state and what might be driving these trends.

Key Company Performance

• Pam Transportation:
  • Operating ratio at 104.2% (expenses higher than revenue by 4.2%)
  • Significant drop in earnings per share, from 23 cents last year to just 1 cent
  • "Shippers leveraging an overcapacity market," President Joe Vitiritto noted as a primary challenge
• J.B. Hunt:
  • Earnings fell 35% with a similar decline in sales
  • The market's reaction was swift, with the stock falling 9% over the week
• ArcBest:
  • Shares tumbled about 7% and then rebounded. Stock price reached an all-time high days earlier.

Insights from FreightWaves

Craig Fuller and Zach Strickland from FreightWaves provided some deeper insights:

• Craig Fuller: "It’s a market bottom... we’re seeing the larger carriers capitulate."
  • Fuller suggests this could signal a nearing market recovery as adjustments in contract rates begin.
• Zach Strickland: "Volumes are relatively strong... it's not a demand issue."
  • The problem lies in excess capacity which has been squeezing margins and profitability across the board.

Political and Economic Factors

The upcoming presidential election and ongoing economic conditions are also stirring the pot. Fuller warned, "Donald Trump winning the election could force a rapid adjustment in supply chain strategies due to anticipated tariff changes."

Looking Ahead: What's Next for Trucking Stocks?

The graph above, originally posted by Felipe Capella, CEO of Loadsmart, tracks the number of active trucking carriers, peaking in 2022, with predictions divided on whether numbers will normalize by August 2024 or June 2025.

A few potential scenarios emerge:

• Market Normalization: With carriers now "capitulating," there might be a more stable environment for pricing and contracts.
• Economic Influence: Continuous economic recovery could buoy the market, but a lot depends on external political and economic factors.
• Technology and Efficiency: Companies focusing on cost reductions and technological enhancements might pull ahead as industry leaders.

While the immediate future might still hold some bumps, the trucking industry could be on its way to a slow but steady recovery. Keep an eye on how political developments and economic policies impact the sector in the upcoming quarters.

Sources: Yahoo Finance | FreightWaves | FreightWaves (2) | U.S. News | Investor's Business Daily

TOGETHER WITH LEVITY

Levity helps fast-moving 3PLs and freight brokers to do more with less by automating the most time-consuming and repetitive email tasks.

Whether it is spot quoting, load building or answering track and trace requests. Levity connects to your inbox, TMS and other tools like rating engines, extracting the right information no matter the language or format. It performs tasks on your behalf automatically in the background so you can save time and focus on building shipper relationships instead of data entry. Learn more on Levity.ai today.

AROUND THE FREIGHT WEB

📉 April 2024 Freight Market Update by Arrive Logistics. The April 2024 freight market report from Arrive Logistics highlights continued soft market conditions with low truckload demand and rate decreases, but anticipates regional volatility with the upcoming produce season.

💸 Freight Tech Startups Face 2024 Challenges. Felipe Capella, Founder & CEO of Loadsmart, warns that Freight Tech startups are facing shutdowns in 2024 due to sustained high interest rates and stagnant freight markets.

🚚 Maybach International Opens Huge Terminal. Maybach International Group LLC celebrates the opening of their new, advanced terminal in Elgin, IL, designed with extensive facilities for drivers and enhanced capacity for truck servicing and warehousing.

📦 Amazon Tops UPS in U.S. Parcel Volumes. In 2023, Amazon surpassed UPS in U.S. parcel volumes for the first time, highlighting a shift in market dynamics with Amazon and alternative carriers gaining ground.

⚖️ CDL School Owner Sentenced for Bribery. A Philadelphia CDL school owner was sentenced to nearly five years in prison for bribing an examiner to falsify student test results.

🚨 FMCSA Warns of Phishing Scam. The FMCSA has issued an alert about a phishing scam involving fraudulent emails that mimic safety audit communications to steal sensitive information from motor carriers.

🗣️Upcoming Freight Market Debate. DAT will debate SONAR about the freight market on June 4th in Atlanta at the Future of Supply Chain event.

🎣 FREIGHT CAVIAR TECHNOLOGIES

In this week's episode of The FreightCaviar Podcast, Paul and Krystian sit down to talk about how FreightCaviar came into existence and how they then partnered to launch ShipperCRM.

Listen on Apple Podcasts or Spotify.
Watch on YouTube.

FREIGHT MEME OF THE DAY

Also, check out:

• 🎧 The FreightCaviar Podcast. Listen to this week's podcast on Spotify & Apple Podcasts.
• 🎧 The Bootstrapper's Guide to Logistics is a podcast that highlights and inspires supply chain entrepreneurs, sharing their stories and building a community from the ground up.
• Want to get your brand noticed by freight brokers? FreightCaviar can help. Work with us to get your services featured in our newsletter, podcast, and more. Plus, we write great articles about what you do. Get in touch with Paul at pbj@freightcaviar.com to learn more.