Monday, Jun 17th, 2013
We hosted meetings with SWFT’s President and CFO. Mgmt noted strong seasonal demand improvement in May and early June and generally tight capacity across the country outside of the Northwest. While pricing remains at the low-end of SWFT’s 2%-3% target for the year, SWFT affirmed guidance from its Analyst Day to grow rev. 10% this year and EPS 15% annually the next several years.
Filed under: Ed Wolfe & Scott Group, Trucking Tags: SWFT
Friday, Jun 14th, 2013
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Research. Included are (1) key takeaways, selected shipper
comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
Filed under: Airfreight & Logistics, Ed Wolfe & Scott Group, Railroads, Trucking Tags: CHRW, CNI, CNW, CP, CSX, EXPD, FDX, GWR, RRTS, SAIA, SWFT, UNP, WAB
Friday, Jun 14th, 2013
Total rail vols increased 0.2% y/y, decelerated from +5.3% and +2.9% the prior 2 weeks. Rail vols posted their slowest growth in the past 7 weeks as vols for the Canadians turned negative and coal vols also inflected negative. Vols are now tracking up 2.0% QTD vs. +1.6% in 1Q and about 50bp above our expectations. Vols are currently tracking the most above our expectations for CP and CSX, but modestly below for CNI and KSU.
Filed under: Airfreight & Logistics, Ed Wolfe & Scott Group, Railroads, Trucking Tags: CNI, CP, CSX, GWR, KSU, NSC, UNP
Thursday, Jun 13th, 2013
The USDA slightly reduced its production forecasts for the upcoming crop due to delayed corn plantings this spring. The USDA still expects a 21% y/y increase in total crop production, down only 70bp from its initial May forecast. The USDA also raised its expectations for high-margin grain exports which it expects to increase 19% y/y.
Filed under: Airfreight & Logistics, Ed Wolfe & Scott Group, Railroads, Trucking Tags: CNW, CP, CSX, EXPD, KSU, NSC, SAIA, UNP
Wednesday, Jun 12th, 2013
Below, we analyze transport stock performance during past periods of rising ten-year treasury yields like we’ve seen over the past month. Transport stocks typically outperform the market in the one-year period after rates bottom with the most outperformance from non-asset-forwarders and truckers. The rails are the one sub-sector that has historically underperformed in this environment. (pg. 2)
Filed under: Airfreight & Logistics, Ed Wolfe & Scott Group, Railroads, Trucking Tags: CSX, FDX, GWR, LSTR, NSC, SAIA, WAB
Friday, Jun 7th, 2013
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Research. Included are (1) key takeaways, selected shipper
comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
Filed under: Airfreight & Logistics, Ed Wolfe & Scott Group, Railroads, Trucking Tags: CGI, CNI, FWRD, GWR, JBHT, KNX, PACR, RRTS, SAIA, UACL, WERN
Tuesday, May 28th, 2013
We just heard from over 75 public and private transportation companies at our Global Transport Conference last week, and today’s audio brief focuses on our top 10 takeaways for the freight transport stocks.
Overall, freight is telling a consistent story about decent but unexciting volume and general economic growth. Within that trend of consistency, we’ve just left a seasonal lull in March and April, and freight volumes are seasonally feeling much stronger the past 2 weeks with the late start to Spring, and this should be positive for near-term transport sentiment. We think KNX and SWFT (the latter not at our conference) are the best ways to play a near-term improvement in demand, and lower diesel fuel prices in 2Q should also help TL earnings in the near term.
The biggest takeaway from our conference is that airfreight volumes have started to improve again in April and May. Combined with lower ocean spot rates, we think the recent solid momentum for EXPD’s stock should continue, and stronger airfreight also seems positive for FDX and UTIW.
Among the rails, trends clearly seem more favorable in the West than the East with respect to coal, and we’re incrementally more positive on UNP and CP out of our conference.
We discuss these items and more, including an appendix with additional takeaways, in today’s audio brief and attached slides.
Filed under: Airfreight & Logistics, Ed Wolfe & Scott Group, Highlights, Railroads, Trucking Tags: Audio, AudioBrief
Tuesday, May 21st, 2013
the Teamsters announced that local union leaders unanimously endorsed a new 5-yr contract with ABFS. Details of the tentative deal are now available after surprisingly little information leaked since the initial agreement was first announced.
Filed under: Ed Wolfe & Scott Group, Trucking Tags: ABFS
Tuesday, May 21st, 2013
We emailed out a 70-page report reiterating our bullish TL thesis. We recommend buying TL stocks into early signs of tighter capacity and our expectations for capacity to tighten further the next few months and lead to stronger TL pricing into 2014. We also published a 60-page report on the rails and our expectation for stronger coal vols ahead. Bound hard copies of both reports will be available at our Global Transport Conference on Wednesday, May 22 and Thursday, May 23. If you can’t attend our conference, email us for hard copies of either report.
Filed under: Airfreight & Logistics, Ed Wolfe & Scott Group, Railroads, Trucking Tags: CHRW, CNI, CP, CSX, KNX, R, SAIA, SWFT, UNP, WERN
Monday, May 20th, 2013
We have been arguing that supply-driven pressures will keep truckload (TL) capacity tight, leading to both strong pricing gains and market share growth for larger, better capitalized carriers over the next five to ten years. While relatively little supply has entered the market, pricing gains have been constrained by a continued weak demand environment. We still believe the capacity situation remains tenuous and believe TL pricing is poised to re-accelerate materially upon even a slight but sustainable improvement in demand, or a tightening in truck utilization resulting from upcoming changes in Hours of Service (HOS) rules.
Filed under: Ed Wolfe & Scott Group, Trucking Tags: CHRW, KNX, R, SAIA, SWFT, WERN