Recent events with Celadon, one of the largest US long-haul truckers, show…
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?