Hurricane Florence is providing a catalyst to transportation stocks as investors bet on the storm causing a near-term spike in demand across the U.S. Southeast.
To be sure, the storm has yet to make landfall and its actual impact remains unknown. Moreover, non-profit groups such as the American Logistics Aid Network are already looking to help coordinate and supply transportation services to affected areas.
Nonetheless, the impending approach of Florence is providing some uplift to the transportation sector. The Dow Jones Transportation Index is up 3.5% since Monday.
Deutsche Bank said in a research report that “concerns around truck supply from the rising severity of Hurricane Florence” are helping lift transportation industry names.
“While we hope the storm weakens significantly and quickly, major weather events can have a significant impact on transportation supply/demand dynamics – particularly for trucking companies,” Deutsche Bank said.
A similar pattern played out during last year’s major weather events. Deutsche Bank says that spot rates in the period following Hurricane Harvey and Irma last year saw trucking spot rates increase 9%. But Deutsche Bank notes that the impact could be even more severe for Florence due to higher population density of Eastern Seaboard relative to areas impacted last year.
“We note that roughly 40% of the U.S. population lives on the east coast, which means Hurricane Florence could have a disproportionate impact on supply chains relative to previous storms,” Deutsche Bank said.
The immediate near-term impact stems from inventory restocking as residents in North and South Carolina and Virginia strip store shelves.
Werner Enterprises (NASDAQ: WERN) saw its shares rise over 9% on Monday, a move which may stem from the carrier’s exposure to retailers such as Dollar General and Dollar Tree, Deutsche Bank said. Werner’s shares have since slid 4.5%
But Deutsche Bank says Knight-Swift Transportation (NYSE: KNX) and Landstar Systems (NASDAQ: LSTR) are “the most exposed” to any Florence-related uptick in transportation activities. Knight-Swift shares are up 2.8% this week while Landstar shares are up 4%.
“While we sincerely hope Hurricane Florence weakens significantly over the next several hours, we will continue monitoring the situation given its potential impact to U.S. transportation companies,” Deutsche Bank said.
Complete Hurricane Florence Coverage
The original notice failed to include propane. It can become a factor particularly if deliveries go on past 12 hours.
Retail activity posted the strongest gain in five months, as big gains in auto sales and rising gasoline prices helped to drive overall activity. Core spending grew at a more moderate pace, but the broad-based nature of the gains is encouraging headed into the holiday season.
Omnitracs would be leveraging Rubrik’s APIs to accelerate its journey towards digital transformation, with a reported 90% saving in time spent working on legacy solutions.
Hublock, a software solution based on data-sharing layer has joined the Blockchain in Transport Alliance (BiTA), an organization dedicated to determining best practices and standards relating to blockchain in the transportation/logistics/supply chain marketplace.
On Wednesday at the Texan Gaylord Resort and Convention Center, following MarketWaves18, members of the Blockchain in Transport Alliance (BiTA) met to receive updates on the organization’s progress toward data standards, hear announcements, share feedback, and learn about the work being done by BiTA’s think thanks.
Amazon came out on top according to the judges in FreightWaves’ Research Institute’s inaugural Freight.Tech 25, which identified the most disruptive and innovative companies in the freight space.
Also in the pickup: vets get a shot at free CDL training; another dispatch from the parking wars
World’s largest container lines plan to look at emerging technologies as new options come to the market.
If you are a small fleet or an owner-operator, discounted products are often just a dream. J.B. Hunt is looking to change that.