This month’s Macro examines March and April data. As shown on Slide 8, freight vols on avg. declined 2% y/y in March and are tracking up less than 1% y/y based on preliminary April data after growing close to 3% the 1st two months of the year. Moreover, our proprietary Seasonal Freight Index (Slide 7) has dipped back below 50 the past 2 months after accelerating sharply late last year and early this year.
Our 6th Annual Global Transport Conference will take place on Wednesday, May 22 and Thursday, May 23. This report is a guide for investors attending the conference, including a list of suggested questions to ask each company and a snapshot of our earnings models.
YRCW’s stock popped 41% after reporting positive 1Q EBIT of $10M, materially improved from -$49M a year ago and its first 1Q operating profit in 6 years. Total rev. declined 3% y/y on weak long-haul tonnage, but consolidated OR improved 500bp y/y to 99.1% into solid cost reductions at Freight.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. 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.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. 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.
YRCW reported adjusted 4Q EBIT of $21M vs. our -$5M estimate and -$25M a year ago. YRCW posted its 3nd straight qtr. of positive consolidated EBIT after 14 qtrs. of operating losses and YRC Freight posted its best OR in 5 years. Based on YRCW’s liquidity, we believe the other LTL’s should continue to trade as if YRCW is likely to remain in business for at least another year. YRCW also stated its plan to target tonnage improvement again in C13 (after focusing more on mix and yields last year), which doesn’t sound great for the LTL competitive env’t this year.
After most TLs missed in 3Q, we expect more in-line reports and slight beats in 4Q as spot TL rates relatively improved and fuel should be a small sequential benefit after spiking during 3Q. Based on improved spot rates, we expected reported yields net of fuel to re-accelerate slightly, although utilization likely remained negative y/y.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. 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.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. 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.
We Expect Minimal Pension Headwinds in C13. With lower discount rates (-50bp) largely offset by improved asset returns (+11%) last year, we expect minimal y/y EPS headwinds for most transports with pension exposure in C13. Based on our updated pension models – built in conjunction with our Accounting & Tax Policy Analyst team – we generally estimate much smaller y/y pension headwinds in C13 vs. C12.