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LTL carriers Old Dominion, Saia, TFI International and FedEx face a bright outlook as freight demand surges. Craig Fuller (@FreightAlley), widely seen as the foremost freight expert, warned of a deep recession in November but is now more bullish on freight than ever, saying demand rivals the Covid surge. On a Thoughtful Money podcast, Fuller suggested even full-truckload is becoming less of a cutthroat commodity as non-English-speaking drivers leave the road and bad operators face crackdowns. x.comÂ
Old Dominion Freight Line can still win plenty of market share in less-than-truckload freight because so many unionized carriers remain, and they have no chance against Old Dominion and its peers. That is the answer to a question about Amazon expanding its own LTL service. x.comÂ
Trucking and freight brokerage stocks look extended and expensive, pricing in an improbably steep earnings ramp. CDL licensing is tightening capacity and AI capex buildouts help areas such as flatbed, but J.B. Hunt trades near 30x next year's earnings. XPO is the most egregious, as less-than-truckload carriers will lag the upcycle while adding capacity. Landstar faces weak brokerage margins and platform pressure versus other public brokerages, before AI's effect on take rates. x.comÂ
UPS, Saia and XPO are among the most exposed to competitive and price pressure from Amazon's new Supply Chain Services, yet their shares have glossed over it, with UPS up almost daily for two weeks. LTL and parcel demand is lagging, and these carriers have relied heavily on price to offset higher costs and weaker volumes. Amazon's entry should squeeze both sides, especially for domestic players. Broader trucking has support from regulatory crackdowns and AI-related flatbed demand. x.comÂ
Aurora could become the platform for driverless trucks, with its market cap able to rise 4-5x or more if it executes. It runs the only fully driverless trucks operating commercially at scale on a major US interstate, hauling freight for a Berkshire company on live Texas lanes, with ample cash to scale. Revenue should go from about $15M this year to about $190M next as the fleet grows, then a capital-light model should lift margins. A reply notes freight carriers still keep drivers in cabs. x.com … Show more
CSX could get a boost as high oil prices push logistics from trucks toward trains. x.comÂ
FedEx should get a good tailwind from falling oil after an excellent earnings report last week, making it a decent setup given the market. x.comÂ