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Landstar, YRC Worldwide, C.H. Robinson, Rise on Expected Demand for Harvey Cleanup

Expectations that trucking demand will increase for cleanup from Hurricane Harvey helped boost shares of Landstar System Inc., YRC Worldwide Inc., and C.H. Robinson Worldwide Inc. By Thomas Black

As reported by Bloomberg, the cost to hire a flatbed truck, which can carry in equipment and haul out debris, could climb as much as 15 percent, said Josh Brogan, who specializes in logistics for consulting firm A.T. Kearney.

That expected jump and increases of perhaps 10 percent for other types of trucking services will ripple through the industry nationwide, he said

“There’s going to be a shortage of trucking equipment for a while and that’s going to drive up prices across the country and also drive up prices locally to a greater extent,” Brogan said.

Trucking will be among the first industries to experience higher demand in the storm’s aftermath.

As soon as flood waters recede and roads are reopened, trucks will begin moving supplies and equipment into the area.

Joshua Brogan, Vice President A.T. Kearney

“There’s going to be a shortage of trucking equipment for a while​”Joshua Brogan, Vice President at A.T. Kearney

Shares of Landstar, which has a flatbed unit, advanced an average of 15 percent in the two months following 13 of 14 major storms, said Jack Atkins, an analyst with Stephens Inc. 

“We expect the impact of the hurricane to further constrain capacity in a market that was already tight, which could drive an increase in spot-market demand and rates,” he said.

Jacksonville, Florida-based Landstar rose 4.4 percent to $91.90 at 1:25 p.m. in New York, adding to a 7.6 percent gain in the previous three trading days.

Since Friday, when the storm began approaching the Texas coast, the stock has recorded its biggest intraday advance since July 2014.

YRC Worldwide shares, which is based in Overland Park, Kansas, have jumped sharply, while C.H. Robinson shares increased yesterday have dropped slightly today.

Federal regulations that take effect in December also are expected to crimp capacity.

Because truckers’ hours automatically will be recorded electronically, and not be subject to fudging by hand on paper, drivers will have to park vehicles when they reach time limits.

Source: Bloomberg

Related Article: Commercial Vehicle Safety Alliance Announces Out-of-Service Criteria Date for Pending ELD Implementation
While the Federal Motor Carrier Safety Administration’s (FMCSA) electronic logging device mandate deadline remains intact for December 18, it comes with a caveat based on an announcement issued by the Commercial Vehicle Safety Alliance earlier this week.

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