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How US Truckload Carriers’ Stock Has Delivered So Far in 2017



US truckload carriers

Trucks remain the dominant force in the US transportation sector. According to the US Department of Transportation, trucks moved ~66% of all US–NAFTA[1. North American Free Trade Agreement] trade in 2016. The performance of the trucking industry is a barometer to assess the US economy.

In this comparative series, we’ll analyze the 2Q17 performance of six major truckload carriers—J.B. Hunt Transport Services (JBHT), Werner Enterprises (WERN), Knight Transportation (KNX), Swift Transportation (SWFT), Heartland Express (HTLD), and Landstar System (LSTR).

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Trucking outlook ahead

The Trump administration has been critical of the Trans-Pacific Partnership (or TPP) and NAFTA. During his August 22, 2017, rally in Phoenix, Arizona, President Trump stated, “Personally, I don’t think we can make a deal. I think we’ll end up probably terminating NAFTA at some point.”

The US, Canada, and Mexico started negotiations to alter NAFTA in August 2017, an action that could put immense pressure on the US truckload carriers. A large portion of US–NAFTA commerce is carried out through trucks, so the fears of tonnage loss are real. This loss could come as a blow to the beleaguered truckload sector.

Consolidations have started in the trucking sector as a result of high capacity and lower freight volumes. In early 2017, Swift Transportation announced a friendly acquisition of Knight Transportation.

Stock price performance

A variety of issues such as the implementation of electronic logging devices (or ELDs), driver compensation, working hours, and other government regulations have hit the trucking sector in 2017. Below are the returns of these truckload carriers since January 1, 2017:

  • J.B. Hunt Transport Services (JBHT): 1%
  • Swift Transportation (SWFT): 10%
  • Landstar System (LSTR): -4%
  • Werner Enterprises (WERN): 17%
  • Knight Transportation (KNX): 13%
  • Heartland Express (HTLD): 3%

The Industrial Select Sector SPDR ETF (XLI) has returned 9.4% during the same period.

In this series, we’ll analyze the income statements, cash flows, and debt levels of these truckload carriers. Plus, we’ll consider analysts’ opinions on these companies after their 2Q17 earnings.

Let’s start with their 2Q17 revenues.


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