“`html
The US freight recession keeps worsening as a leading freight company’s stock plummets due to weak trucking volumes, resulting in a first-quarter earnings miss on both profit and sales.
Quick Facts
- A leading freight company’s stock declined by 13% after reporting a $70.3 million decrease in profit compared to the same period last year.
- Revenue fell short of forecasts, slumping 9% to $2.94 billion.
- The broader freight market is experiencing a slowdown due to weak sales and an excess of trucks.
A leading freight company’s stock plummeted by 13% after it reported a profit of $127.5 million, marking a $70.3 million decline from the previous year. Additionally, the revenue fell 9% short of forecasts, amounting to $2.94 billion. The broader freight market is also grappling with a slowdown, attributed to weak sales and an overabundance of trucks.
The company’s struggles are reflective of the broader freight market’s challenges, which have persisted since the onset of the pandemic. Weak sales and an oversupply of trucks have been driving the market’s contraction. Bank of America’s senior transportation analyst, Ken Hoexter, highlighted the persistent weakness in demand and historically low spot pricing, emphasizing the market’s lack of a significant recovery.
The freight recession, initially signaled by JB Hunt in the first quarter of the previous year, has persisted, with pandemic-induced over-buying dampening goods demand and exerting substantial pressure on the freight and transport industry. This trend has continued into 2023, characterized by a surge in trucking unemployment and the departure of several major carriers. Notably, current trucking spot rates have declined by 6.5% this year, according to WSJ.
“`
