Publicly Traded For-Hire Truckload Carriers
Value of For-Hire Financial Data
The publicly traded for-hire truckload carriers offer us a window into the current health of the overall truckload market. They are a proxy for the status of all the quality truckload carriers in the industry. For decades, we have managed and tracked the earnings releases for the fleets, monitoring every data point available from truck and trailer counts to income margin.
Why does this matter to us?
Truckers haul freight in trucks and trailers – their tools of the trade. And when truckers make money, they buy new trucks to replace the old ones in their fleet. Kenny Vieth, President & Sr. Analyst of ACT Research, outlines some of these points in a February 2024 presentation:
We’re known for saying, “When truckers make money, they buy trucks.” As asset-heavy organizations, fleets are required to buy new equipment when their profits are up because of the tax implications if they don’t. We pay extra attention to carrier profitability because of the implications for tractor demand. This is particularly true at this point in the current cycle (March 2024): with increased tractor demand and insourcing of freight from private fleets, the for-hire fleets are getting hit hard, not only losing freight but taking rate cuts as the supply/demand balance of the truckload market is off.
Another look at what Kenny Vieth had to say about how and why publicly traded truckload carriers' profitability matters:
In addition to profitability, we also examine:
- Total Revenue Per Loaded Mile
- Loaded Miles Per Tractor
- Length of Haul
- Transportation Revenue
- Operating Cash Flow
- Gross Capital Expenditures
- Equipment Sales
These, among other measures, give us a sense of how fleets are operating their business and how those tactics are impacting revenue. We continue to go back to this data to understand how the market has shifted and what this means for the next part of the cycle.
Why does this matter to you?
Because it’s all connected and it’s all cyclical.
The patterns of supply and demand, profitability, and Class 8 tractor demand are more than mere indicators; they’re the points on the map that, when you zoom out, can point you to success. Whether you’re a for-hire carrier adjusting your fleet size, a logistics broker optimizing for operations, or a shipper planning your logistics strategy, the insights gleaned from monitoring the health of publicly traded truckload carriers offer a competitive edge.
The Economics of Freight
The relationship between Class 8 vehicle demand and economic activity, particularly goods, is a longstanding trend that industry analysts have utilized to understand the historical and future production of trucks and tractors.
Market Indicators
The market vitals that measure the health of the industry are what we call market indicators; those metrics allow OEMs, suppliers, investors, dealerships, and fleets to understand and plan for the next phase in the cycle and beyond.
Resources
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