Schneider National goes public, will others follow?

Schneider National's initial public offering has netted the company $550 million.

Schneider National's initial public offering has netted the company $550 million.

Transportation provider to invest over $100M of proceeds in intermodal chassis

For the first time since 2010, one of the nation’s leading transportation providers has gone public. Shares of Schneider National began trading on the New York Stock Exchange floor on Thursday, April 6.

Introduced at $19 per share in an Initial Public Offering, which is where it also closed the day after trading slightly higher, the sale is expected to be used to pay down debt and make an investment in intermodal, Chris Lofgren, president & CEO, told Bloomberg.

“We run on the railroads for a big part of our business and we’re going to buy chassis that move those boxes, so $110 million [is the] investment we’re going to make there,” Lofgren said.

For the first time since 2010, one of the nation’s leading transportation providers has gone public. Shares of Schneider National began trading on the New York Stock Exchange floor on Thursday, April 6.


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Schneider was also expected to use about $150 million to pay down debt, according to analysts, in addition to the large investment in chassis equipment.

Schneider National is trading under the stock symbol SNDR. Approximately 28.9 million shares were sold, putting the value of Schneider at $3.3 billion.

John Larkin, a managing director with Stifel Nicolaus & Co., told the Wall Street Journal ahead of the IPO that the move is interesting at this time.


“The timing is questionable,” he said. “The first quarter has not been stellar from a demand point of view, and contract pricing is not really moving in the other direction. In fact, some shippers are asking for reductions.”

The Journal noted that transportation stocks have been a mixed bag of late. J.B. Hunt Transport Services is up 11% from a year ago but down 4.9% so far this year. Similarly, shares of Swift Transportation have fallen 16% this year and Werner Enterprises are down 4.3%.

In the latest jobs report, the government reported that only 98,000 jobs were created in March, a major disappointment for an economy that had seemed to be heading upwards. However, all indications are that the economy continues to improve and based on companies filling for IPOs, data kept by Dealogic indicates 2017 should be a strong year, reflecting confidence from the nation’s business community.

According to Dealogic, companies newly listed to exchanges have been trading about 30% higher than their IPO price. That should be good news for other transportation entities that be interested in IPOs.

With increasing regulations adding cost, equipment prices rising due to mandated technologies such as roll stability control systems to be required this summer and the expected price increase to meet Phase 2 Greenhouse Gas regulations in the coming years, the stock market may become an attractive place for transportation companies to go to find operational cash.

Bloomberg reports that shares of publicly traded trucking companies are up 13% in the past year. That may have many companies rethinking their choices to stay private.

“Clearly, we move the nation’s economy and I think everybody is hopeful that we are going to start seeing growth and that’s part of it,” Lofgren answered when asked why investor interest was growing in transportation stocks. “Also, the regulations are going to cause people to decide if they are in or are they out and I think that is going to be good for the industry. … People are hopeful.”

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Brian Straight

Brian Straight has covered the U.S. trucking and transportation community for more than 10 years, winning numerous regional and national editorial awards, including a Jesse. H. Neal Award. Prior to working on FreightWaves, Brian spent 10 years at industry trade magazine Fleet Owner, and prior to that managed daily newspaper editorial operations.