Recent events with Celadon, one of the largest US long-haul truckers, show that to make a small fortune…start with a large fortune.  Celadon’s share price has dropped from $26 in 2015 to a little over $3 today, and its creditors are in the process of taking a haircut.  Most troubling is an operating loss of $10 million for the quarter ending in March.  Trucking companies have a lot to contend with.  Despite what carriers tell me, I am yet to be convinced that declining fuel costs boost profitability.  I think it is the opposite.  Additionally, driver wages and insurance costs are rising, and the equipment's residual value is decreasing. The only contra indicator is that while I have identified a number of months of declining new truck sales – June was an exception – sales we up 7% for new Class 8 vehicles.

 

The cost of operating trucks continues to rise…how will you react?