Inflation is heating up again, with wholesale prices, oil above $100 and diesel up nearly 78% YoY feeding straight into the cost of moving goods. That pressure can squeeze some trucking and logistics stocks while opening the door for others that handle pricing power, contracts and fuel exposure differently. This article walks through three U.S. carriers exposed to this news and how investors might think about them now.
The stocks covered below are only a small sample, since the full screen surfaced 23 more U.S. trucking, freight and logistics carriers with equally compelling stories that are not unpacked here. To go wider than this short list, head straight into the U.S. Trucking, Freight & Logistics Carriers screener to identify, filter and analyze the highest conviction ideas for your watchlist.
Saia (SAIA)
Saia is one of the clearest plays on the trucking and freight theme in this screen, because its business operates in the less than truckload segment where diesel costs, freight demand and pricing power all intersect.
Saia runs a North American less than truckload network, handling mid sized freight shipments and related logistics services. All of its US$3.4b revenue comes from transportation services across the United States, and it has a market value of about US$9.2b.
"The ongoing expansion and maturation of Saia's national terminal network, combined with network densification, is starting to unlock cost efficiencies and higher shipment volumes in new and legacy markets, positioning the company for top-line revenue growth and improved operating margins as these facilities move toward scale."
The key issue to watch is how a single pressure on the cost side interacts with that growing freight volume to shape future profitability.
To see how that cost pressure and freight volume story could accelerate or stall from here, read the full narrative for Saia to understand what the market might be missing.
Knight-Swift Transportation Holdings (KNX)
Knight-Swift Transportation Holdings sits right in the middle of this trucking and freight theme, with a large truckload fleet, a growing less than truckload presence, and a range of logistics and intermodal services that all reflect every move in diesel prices and freight rates.
Knight-Swift Transportation generates most of its revenue from truckload services at about US$5.0b, with less than truckload at roughly US$1.5b, logistics at US$567.7m, intermodal at US$396.7m, and other activities at US$328.2m, giving the Phoenix based carrier a market value around US$11.2b.
"The continued expansion and integration of the LTL (less-than-truckload) segment is driving shipment and customer growth, with significant operating leverage expected as new facilities and network investments mature, supporting long-term revenue growth and eventual margin improvement."
Everything now turns on how a single pressure point in its cost base and pricing cycle shapes those potential margin gains.
Those margin swings are the real story, and the full narrative for Knight-Swift Transportation Holdings shows how Knight-Swift Transportation could see that operating leverage either accelerate or quietly stall.
Schneider National (SNDR)
Schneider National sits right in the middle of the U.S. Trucking, Freight & Logistics Carriers theme, using a mix of long haul trucking, rail based intermodal and asset light logistics to move goods for shippers whose contracts and freight rates are exposed to diesel and inflation.
Schneider National generates about US$2.5b from Truckload, US$1.1b from Intermodal, US$1.3b from Logistics and US$694 million from fuel surcharges, with other activities at US$410 million and inter segment eliminations of US$180 million, giving the stock an equity value near US$5.9b.
Rising wholesale inflation and diesel sensitive freight rates make Schneider National a useful bellwether for how pricing power and contract structures react when transportation costs move sharply higher in a short period.
"The rapid acceleration of automation, including digital freight platforms and autonomous vehicle technology, is expected to erode demand for traditional trucking services over time."
What really matters now is how one pressure point in Schneider National's freight mix ultimately shows up in pricing, volumes and profit margins.
That pressure point is exactly where the story gets interesting, and the full narrative for Schneider National shows how Schneider National could turn automation risks into accelerating competitive advantage.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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