Comments on January transport activity, slowness dismissed as weather related?
Dec shipping inbound into LA and Long Beach tends to drop from Nov, but this year the drop was 13.45% versus 7.0% in 03. Dec, 04 is still up yoy at 546,605 vs 512,016, so maybe just an indication that the frantic pace of the fall of 04 is off.
Truckers upbeat despite signs of slowing Jan volumes
Fri Jan 28, 2005 01:55 PM ET
By Reshma Kapadia
NEW YORK, Jan 28 (Reuters) - Trucking executives this week forecast strong freight and pricing trends for 2005 and downplayed a recent deceleration in tonnage growth as weather related.
"Across the board, the fourth quarter was a very good quarter and December finished stronger than what they expected, especially with tough comparisons," Robert W. Baird analyst Jon Langenfeld said.
Volume growth is expected to steady this year as truckers hit tougher comparisons from 2004's record freight volumes. In 2004, transport companies were able to raise prices for the first time in years amid robust shipping demand sparked by the U.S. economic expansion, a surge in global trade and tight capacity in the sector.
"I don't see any cracks on the pricing side," Langenfeld said, echoing statements from a slew of trucking executives on earnings calls this week.
Shared-loads, or less-than-truckload, carriers, including Arkansas Best (ABFS.O: Quote, Profile, Research) and Overnite Corp.(OVNT.O: Quote, Profile, Research) reported higher quarterly profits, and Yellow Roadway Corp. (YELL.O: Quote, Profile, Research) swung to a profit as margins improved. But Overnite also had company-specific issues that weighed on its stock, which slid as much as 12 percent to $28.11.
Its 2005 outlook was below estimates, hurt by higher-than-expected pension-related expenses, and fourth-quarter tonnage growth slipped as it tried to pare lower-margin business, mostly among national accounts.
However, the company was optimistic about 2005.
"It's a small indicator of where the quarter's going to turn out, but we are seeing a fairly strong increase in all of our regions," said Overnite Chairman and Chief Executive Leo Suggs in a conference call. "Nothing is inhibited by weather and growth seems strong all across."
Cargo hauler USF Corp. (USFC.O: Quote, Profile, Research) on Friday said its quarterly profit fell in part due to storms on the West Coast and in the Midwest in December, as well as a higher tax rate.
The company, whose shares fell 3.5 percent to $32.73, also said its sales pipeline looks strong and it is expecting 25 percent to 30 percent earnings growth for 2005.
Arkansas Best, a national shared-loads carrier, on Thursday reported higher quarterly earnings on strong tonnage growth but indicated freight volumes decelerated in December and January.
Arkansas Best (ABFS.O: Quote, Profile, Research) shares fell 76 cents to $39.04.
While January is typically a slow period for the transport sector, Wall Street is keeping an eye on the trend.
"We believe there has been a notable softening in demand even after accounting for seasonality, beginning in late December and continuing into January," Bear Stearns analyst Ed Wolfe said in a research note. "It's difficult to understand how much of the slowdown can be attributed to the economy and how much can be attributed to weather."
Railroads have also seen a decline in carloads, or volume, this month. Analysts cited weather and Union Pacific Corp.-related (UNP.N: Quote, Profile, Research) disruptions.
But trucking operator Yellow Roadway's chief executive, Bill Zollars, said in a conference call that there was little change to recent freight trends if weather-related issues were stripped out: "We expect the economy to remain solid across the board and firm pricing to remain same."
Yellow's shares gained 85 cents to $54.04. The Dow Jones U.S. Trucking index added 13 cents to $261.82 in afternoon trading. |
