In The News

Analyst says trucking demand wilting

NEW YORK — A JPMorgan analyst lowered his 2009 estimates across the trucking sector Wednesday, noting growing weakness among companies already battered by a sour economy.

“Both transport and macroeconomic data have weakened significantly in the fourth quarter, indicating a fall in demand which is even sharper than we had previously anticipated,” Thomas R. Wadewitz wrote in a note to clients.

The industry’s main trade group, the American Trucking Associations, last week said goods shipped by trucks in the U.S. in October fell at a faster-than-expected rate. Other key economic indicators, including the Institute for Supply Management’s closely watched service sector index and industrial production trends, “also clearly point to a sharp falloff in economic activity,” the analyst said.

He lowered estimates for less-than-truckload carriers by an average of 7.3 percent for next year, and cut his truckload forecasts by an about 12.9 percent. Less-than-truckload carriers, such as YRC Worldwide Inc. and Old Dominion Freight Line Inc., usually fill their trucks with freight from a variety of sources and might re-sort and redistribute it at a company terminal along their route. Truckload carriers, such as Knight Transportation Inc. or Werner Enterprises Inc., transport freight directly from the shipper to the receiver.

While truckload carriers should benefit from slumping fuel prices, they are also hit hardest by troughs in economic activity.

However, shares of trucking companies mostly traded higher at midday along with the broader market. YRC Worldwide rose 40 cents, or 12.7 percent, to $3.55 and Old Dominion added 69 cents, or 3.1 percent, to $23.17. Knight Transportation gained a penny to $15.12, and Werner rose 48 cents, or 2.9 percent, to $17.22.

Kevin Jones of The Trucker staff can be reached for comment at [email protected].