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Trucking CEOs expect higher prices in the second half of the year

The picture depicting the delivering of valuable asset using a trailer truck without protection

CNBC recently reported that trucking CEOs in the U.S. believe the industry will maintain pricing power even with global disruptions due to COVID, war, inflation, and other factors. According to Derek Leathers, CEO of Werner Enterprises, which moves freight for Walmart and Target, the supply chain is improving and has passed the worst point. However, he warned that trucker headwinds will keep rates well above pre-pandemic levels for the rest of 2022. Trucking stocks have been among the best performers in July, while the S&P 500 has gained more than 7%. SAIA and ArcBest are up more than 20%, while Werner Enterprises, Knight-Swift, and JB Hunt are up more than 10%.

They also reported that there was a concern for a “freight recession” due to falling rates in the spot market for trucking. Spot trucking experienced a boom during the pandemic as businesses adjusted to clogged supply chains and were willing to pay historic rates to transport goods during the e-commerce boom. The majority of trucking, however, is still done through contracts with carriers and their customers, such as large retailers.

The top three trucking companies, which generate the majority of their revenue from contracts — Knight-Swift, FedEx, and JB Hunt — have reported double-digit rate increases in their most recent earnings. Click here to learn more.