Today’s Pickup: transport stocks still largely unaffected by trade war risk

Good day,

Wall Street got ‘hammered’ as trading opened this morning after news China’s imposition of retaliatory tariffs on American agricultural products, automobiles, and aircraft rattled markets. Corn, wheat, and soybean commodity prices were down sharply, Boeing stock immediately tumbled 4%, and automakers Ford and GM also dropped at the open. 

Tellingly, the transport stocks on FreightWaves’ watch list were largely unaffected by the market’s perception of heightened trade war risk. Truckload, LTL, 3PL, air and rail stocks were all posting modest gains this morning; maritime was the most negatively affected sector, with several bulk maritime carriers down 2-3% on the morning.

Did you know?

According to Stifel, in March Class 8 net truck orders were 46,900 units (+16% sequentially and +102% y/y) which capped a torrid last six months.

Quotable:

“The true purpose is not to escalate it to a trade war, but to demonstrate no weakness.”

-Aidan Yao, an economist at Axa Investment Managers, on China’s retaliatory tariffs

In other news:

Boeing, Ford lead list of casualties in China-U.S. trade spat

U.S. automakers, aero companies, grain merchants and chipmakers were the early casualties on Wednesday after China and the United States announced tariffs on $50 billion of each others imports, cementing fears they were moving towards a trade war. (Reuters)

Trucking companies are struggling to attract drivers to the big-rig life

Enrollment in commercial-driving courses at the James Rumsey Technical Institute dropped to its lowest point in about 15 years this winter, a signal that the industry’s attempts to sell workers on truck driving haven’t gained much traction. (WSJ)

Port of Los Angeles to get new container staging facility

When completed, the hub will take 3,500 truckloads per day from nearby container terminals to the HPEC staging area, HPEC officials said in a press release (Progressive Railroading)

Kongsberg and Wilhelmsen launch autonomous shipping joint venture

On Tuesday, shipping conglomerate Wilhelmsen Group announced that it is launching Massterly, an autonomous-shipping joint venture with technology firm Kongsberg. (Maritime Executive)

A handy guide to Tesla’s guidance

Liam Denning went back through the past three year-end shareholder letters and counted up 36 objectives in their outlook sections, falling into three buckets: Financial, Operations and Sales. (Bloomberg)

Final Thoughts:

Bob Costello, the chief economist of the American Trucking Associations, foresees a grim future for the supply of truckload drivers in the U.S. over the next eight years. Costello said that there are about 500,000 over the road truck drivers in the United States, and estimated that the industry was 50,000 drivers short in 2017.

“If things do not change, we could get to 175,000 short by 2026,” he said. Costello got to his 175,000 number by taking current shortages, projected demand, and the fact that the industry is going to need to mint 900,000 drivers over the next 10 years just to replace drivers leaving the industry, mostly through retirements.

With a shortage of 175,000 drivers, “the industry is in for a lot of hurt,” Costello said. Given the key role of trucking to commerce, “so is the economy.”

Hammer down everyone!

Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.