EFS: Truckload valuations and market metrics — Great Quarter, Guys

Less-than-truckload freight has taken a front seat during the COVID-19 pandemic as e-commerce and parcel service ramped up thanks to consumer buying habits. On this episode of Great Quarter, Guys, Andrew Cox and Seth Holm look at how that ramp-up has supported fleets and also impacted other modes of transportation. 

Cox and Holm welcome Tom Wadewitz, UBS Securities senior equity research analyst to the show for the discussion. Wadewits recently moved his assessment of the trucking industry down to the neutral category, even though the market has remained tight. He said his rationale was based on the cyclical nature of the trucking market and the prior valuation cycles of the last few years. 

Wadewitz gives his opinion on the intense rush of Class 8 truck orders coupled with the continued driver shortage and what that indicates for driver capacity in Q2. “There are a lot of factors that could keep the market tight. We think as you go into 2022 you will see capacity come back in,” he says.

Cox and Holm ask Wadewitz about his favorite subsectors of transportation to watch right now and he says there is a lot of room to strengthen freight in general, including releasing pent-up consumer demand. He believes truckload is the constrained mode, but LTL, rail and intermodal have room for volume growth.