Dive Brief:
- The Dow Jones Trucking stock index had a "solid week" last week, despite weak broad market indexes, ACT Research reported. The index reached 913 last week, up from 694 the week of March 20. As of Tuesday morning, the index had risen another 30 points.
- Trucking shares were up on the day by 1.2% Friday, according to Nasdaq, which listed U.S. Xpress as the group leader. When the market closed, it had traded up by 7.13%.
- Many trucking firms ended Friday in the green, including J.B. Hunt (up 2.21%), Knight-Swift (up 3.48%). Werner (up 2.36%) and XPO (up 3.41%).
Dive Insight:
After the trucking industry endured conditions in April that one analyst described as "worst of the worst," focus is shifting to recovery. The latest numbers signal volumes, rates and activity have turned a corner, and so has investor confidence.
Transport Futures Principal Noël Perry told Transport Dive in an interview that investors look at the same news and numbers the industry does. One of the reasons trucking is thought of as a leading economic indicator (Perry contends it is not), is because industry reports are typically available before others, and they're produced with more frequency.
"You tend to find out about trucking before anything else. And so, when an economy turns, one of the first things people notice is trucking," Perry said. "Therefore, if [investors] are waiting for some signal, they get it with respect to trucking first."
FTR reported reefer origin volumes were above normal on the West Coast for the week ending May 11, although it remained uneven in other regions that produce food. The firm reported in its midyear economic outlook and update that intermodal has also stabilized at a low level.
Truck-related operations are improving, Morgan Stanley reported Thursday. It found 47% of carriers are having difficulty running smooth operations due to COVID-19, which marked an improvement from 60% recorded two weeks before. And it was the first time the survey of 400 carriers, shippers and brokers reporting challenges running smooth operations dropped below 50% since the firm began asking the question in mid-April.
FourKites reported inbound and outbound truck movement is beginning to rise across most of the U.S. Load trends for May 18 showed the largest increase in inbound truck movement is in Arizona at more than 24% compared to a two-week average, while outbound movement surged the most in Alabama, up more than 15%. Arizona's stay-at-home order expired May 15, and Alabama's expired April 30. Perry said the reopening of states is another factor providing shares with momentum. Every state is taking measures to get businesses going again, although it's occurring in phases.
Beneath the data is the basic notion that trucking is essential — a sentiment that has come to the forefront during the last few months.
"That doesn't mean that trucking stocks are a safe bet," Perry said. "But if you're asking about the industry, it's a very dependable industry, because it's so basic. Everything we consume in this country comes by truck, most of it anyway. So, you know we're going to need a lot trucks."