Trucking Stocks Dip After Downgrading of Operators
Trucking companies are used to industry fluctuations, as their commitment to working with multiple different organizations and partners opens them to the success or failure of said partners. But a sharp dip on the share prices of freight carriers on Thursday has many concerned. Many experts in the industry share the opinion that the downgrading of several operators may have been what caused the plummet. Stifel Inc., the company that downgraded said operators, is expected to survive but to remain weak for the rest of the year.
USA Truck Inc., Group Inc., and Marten Transport Ltd. were among the companies targeted for downgrades by Stifel. These truckload carriers are known for providing transportation services for freight. By taking cargo from ports or warehouses to distribution centers, these companies provide a very important function in the economy. Downgrading the shares of these well-known companies will undoubtedly have a negative effect on the industry, and the Nasdaq shows multiple percentage point drops for each company’s stock. Uncertainties in terms of pricing as well as the amount of service these companies would have throughout the end of the year led to the dip.
The report said: “Many shippers have effectively elected to toss to the wayside any talk of partnerships, relationships, cooperation, collaboration, etc. Shippers are under enormous pressure to cut transportation costs and seem not to be satisfied with the massive fuel surcharge reductions racked up over the past year and a half.” Though the reporter’s lead author declined to comment on the stock dip, it is clear that mounting expenses, which have always been a concern in the trucking industry, have led to the financial uncertainties for these companies. This type of uncertainty is somewhat common to truckers, but many were surprised by the sudden downgrades.
Progress had been noted at the beginning of the year, as the post-holiday rush usually provides many truckers and trucking companies with plenty of job opportunities as retailers look to restock after the busy holiday season. While the shippers themselves are seeing an increase in business, truckers are suffering as rates are slashed and stock prices continue to fall. This type of change has been seen in recent years, so it doesn’t mean that the companies can’t bounce back. Nonetheless, this type of drop is disheartening for trucking companies who pride themselves on remaining as consistent as possible in their success throughout the year.