Trucking Company Profitability Amidst High Fuel Prices, Etc.

Topic 32129 | Page 1

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Harvey C.'s Comment
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I was out of state last week on vacation and tried to avoid taking care of much business, watching stocks, etc. Got home yesterday and I noticed Marten's stock (MRTN) price was up quite a bit so I looked further into what was going on. It appears that Marten is the only publicly traded trucking company to have announced second quarter earnings so far.

I thought it was very encouraging to see that despite higher fuel, wages, etc. they reported record profits last week and their stock rose 15% on that news. You can see a summary of results here MRTN Earnings

Here is a view of five publicly traded companies I could think of/find: Daily Price Chart and another: Weekly Price 12 Month Chart

This is not a sector I've followed very closely and I haven't taken time to do much research but it would appear that at least some trucking companies are able to pass on higher costs to their customers and stay moving.

Anne A. (and sometimes To's Comment
member avatar

I was out of state last week on vacation and tried to avoid taking care of much business, watching stocks, etc. Got home yesterday and I noticed Marten's stock (MRTN) price was up quite a bit so I looked further into what was going on. It appears that Marten is the only publicly traded trucking company to have announced second quarter earnings so far.

I thought it was very encouraging to see that despite higher fuel, wages, etc. they reported record profits last week and their stock rose 15% on that news. You can see a summary of results here MRTN Earnings

Here is a view of five publicly traded companies I could think of/find: Daily Price Chart and another: Weekly Price 12 Month Chart

This is not a sector I've followed very closely and I haven't taken time to do much research but it would appear that at least some trucking companies are able to pass on higher costs to their customers and stay moving.

Hay Harv,

We've been following a bit, as well !!

JBH and ODFL are looking pretty good, also.

I'm posting from my phone right now; Will add link later.

Good stuff, tho!

~ Anne ~

OWI:

Operating While Intoxicated

PackRat's Comment
member avatar

Small companies will go under. Big companies will have more freight. Economics.

Harvey C.'s Comment
member avatar

double-quotes-start.png

I was out of state last week on vacation and tried to avoid taking care of much business, watching stocks, etc. Got home yesterday and I noticed Marten's stock (MRTN) price was up quite a bit so I looked further into what was going on. It appears that Marten is the only publicly traded trucking company to have announced second quarter earnings so far.

I thought it was very encouraging to see that despite higher fuel, wages, etc. they reported record profits last week and their stock rose 15% on that news. You can see a summary of results here MRTN Earnings

Here is a view of five publicly traded companies I could think of/find: Daily Price Chart and another: Weekly Price 12 Month Chart

This is not a sector I've followed very closely and I haven't taken time to do much research but it would appear that at least some trucking companies are able to pass on higher costs to their customers and stay moving.

double-quotes-end.png

Hay Harv,

We've been following a bit, as well !!

JBH and ODFL are looking pretty good, also.

I'm posting from my phone right now; Will add link later.

Good stuff, tho!

~ Anne ~

I wasn't feeling particularly well yesterday and having a bit of a hard time focusing my attention. Tested positive for COVID this morning (symptoms are mild but I had a dentist appointment for tomorrow so I figured I better check. Anyways, sat around home in the office most of the day (isolating from Linda who is still okay) and had more time to check on others. So far, Marten seems to have the biggest upside move but some others are doing well lately. Knight-Swift and JB Hunt reported earnings that were slightly above expectations but I didn't search out financial details. Still waiting for others to report to see how they do. I'm curious to see if there is much difference between sectors in truck companies. Someone posted recently that refrigerated loads are less prone to slowing down during recessions since everyone is still buying food. However, there are too many other differences in companies and their financial condition to be able to sort out earnings differences just based on type of hauling.

Shortly after Michael started driving two years ago he and one good team driver he worked with both talked about buying their own truck some day. I hope he watches to see what happens with some of these owner operators to get that idea out of his head. He hasn't mentioned anything like that since he started Marten since he really likes his DM and just loves his job.

I updated this chart to include ticker symbols of other companies that I searched out today: Weekly Prices 9 Companies You can select daily prices on this chart if you want by clicking on the blue text just above MRTN but it will give a shorter time period.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

OWI:

Operating While Intoxicated

Harvey C.'s Comment
member avatar

Small companies will go under. Big companies will have more freight. Economics.

I used to work in lending (farms and agri-businesses, mostly) for 27 years. Often times when things started to get tough owners would want to borrow even more money to help make ends meet but didn't scale back and when lots of other folks were having fire sales. Debt can be a useful tool but it can be become a big burden, especially with increasing interest rates. I hope everyone can set aside a reserve fund in case things head south in a bad way.

Old School's Comment
member avatar

Harvey, the trucking business is fairly complex in my opinion. There are different markets for different types of operations. Most Owner/Operators pursue what's called the "spot market." Most major carriers focus on "contract rates." The spot market can be fairly lucrative, but tends to be wildly volatile.

The contract rates are rates that the customer and carrier have already agreed on. They may be less than most O/Os are wanting to work for, but there are times like now where the bottom has fallen out of the spot rates, and the contract prices have remained profitable.

The leverage the bigger trucking companies have is primarily in purchasing discounts. They all put forth considerable efforts at controlling costs and increasing revenues. Of course it is much easier for them to do these things due to the scale at which their operations work.

Many times the variables, like fuel price, are negotiated into the contract rates via fuel surcharges.

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