US trucking sector
In 2017, trucks hauled ~10.8 billion tons of freight, representing ~70.2% of all the domestic freight tonnage in the United States. Last year, the US trucking industry generated $700.1 billion in annual revenue, which was 79.3% of the country’s freight bill. The trucking industry, a vital part of the overall supply chain, is highly fragmented in the United States.
Several companies operate in all subsectors of the industry. The subsectors are truckload, less-than-truckload, freight brokerage, warehousing, dedicated, contract logistics, ocean freight, and air freight. The companies operating in most of the transportation and logistics subsectors are XPO Logistics (XPO), J.B. Hunt Transport Services (JBHT), Schneider National (SNDR), and Knight-Swift Transportation (KNX).
Trucking companies’ stock performances
Road transportation companies witnessed a steady rise in spot and contract rates for truckload as well as less-than-truckload services in 2018. Higher freight volumes and pricing gains boosted their top and bottom lines in the first half of 2018. But has it reflected in their stock prices? Let’s look at their year-to-date returns as of September 4.
- XPO Logistics (XPO): 15%
- J.B. Hunt Transport Services (JBHT): 3%
- Schneider National (SNDR): -7%
- Knight-Swift Transportation (KNX): -23%
- Landstar System (LSTR): 13%
- Ryder System (R): -11%
- Werner Enterprises (WERN): -6%
The SPDR S&P Transportation ETF (XTN), which has a 24.4% weight in major trucking companies, has returned ~4% since January 2018.
In this series on major US truckload companies, we’ll do a comparative analysis of their second-quarter results. We’ll compare their income statements, cash flows, and leverages. We’ll also look at analysts’ opinions of these companies after their second-quarter results. Finally, we’ll do a comparative valuation after their second-quarter earnings.
Let’s start with their second-quarter revenues.