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 on the rise and the residual value of the equipment is going down. 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?