Yesterday I had something halfway decent to say about the prospects for LTL truckers like YRC Worldwide and Arkansas Best. Today gives us news that's less than halfway decent. Truck tonnage just declined mightily:
That's not good for those two companies because they just raised their rates. Oops! The economy just slammed on the brakes; doing that in a big rig can make it jackknife. Tonnage for the last mile is going to get scarcer as evidence mounts that shippers will face weak demand going into peak shipping season. Retailers must have re-stocked inventories to the point where they have all they need and then some. They can see the handwriting on the wall for the Christmas shopping season as consumers default on their debts. No more credit-driven holiday shoping splurges for those folks.
It's going to be a "blue Christmas" all right, especially for companies in the supply chain.
Full disclosure: No positions in YRCW or ABFS.
The American Trucking Association's for-hire truck tonnage index fell 2.7 percent in August from July, its largest month-to-month drop since March 2009.
That's not good for those two companies because they just raised their rates. Oops! The economy just slammed on the brakes; doing that in a big rig can make it jackknife. Tonnage for the last mile is going to get scarcer as evidence mounts that shippers will face weak demand going into peak shipping season. Retailers must have re-stocked inventories to the point where they have all they need and then some. They can see the handwriting on the wall for the Christmas shopping season as consumers default on their debts. No more credit-driven holiday shoping splurges for those folks.
It's going to be a "blue Christmas" all right, especially for companies in the supply chain.
Full disclosure: No positions in YRCW or ABFS.
