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Trucking Stocks Massacred After Target Warns Of $1 Billion In Incremental Freight Costs
Zubu Brothers ^ | 5-18-2022

Posted on 05/18/2022 12:29:32 PM PDT by blam

Remember when freight, trucking and logistics data provider Freightwaves warned at the last day of April that a freight recession was imminent and was set to cripple the trucking sector and broader economy (prompted Jim Cramer to declare that “Mr Freightwaves” knows nothing). Well, as always, Cramer was wrong and Freightwaves was right, and today we are seeing nothing short of bloodbath in the trucking and logistics space, where stocks have plunged the most in over six weeks amid weak outlook from several retailers, including Target, which just like Walmart plunged the most since 1987 as inflation crippled its profit margins, and as it warned that fuel and freight costs soared in the first quarter.

How bad is it looking? On the Target earnings call, the COO said the company is now expecting $1 billion in incremental freight costs this year.

The Russell 3000 Index Trucking Subsector (RGUSPTK) dropped over 10% versus a 3.3% drop in the S&P 500 Index, although both are still sliding.

Big decliners on the trucking index include Saia, JB Hunt, ArcBest, Knight-Swift, Werner, Schneider and Old Dominion

The bottom line is that, just as Freightwaves warned two months ago, prices are now so high that demand destruction is crushing margins, with a recession now just a matter of months.


TOPICS: Society
KEYWORDS: costs; economy; freight; freightwaves; recession; shipping; supply; target; trucking
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Soaring Gas Prices Reach New Record High For 12th Day Straight

Report: US Gas Prices Could Double Soon, Amid Potential Supply Shortage

Filled my gasoline tank this morning, $4.19 a gallon just west of Mobile.

1 posted on 05/18/2022 12:29:32 PM PDT by blam
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To: blam

Why would trucking stocks crash when Target just announced that Truckers are taking $1 billion more from them?

Target admitting they can’t squeeze or outsource to China their trucking needs should be a good thing for American truckers, shouldn’t it?


2 posted on 05/18/2022 12:33:21 PM PDT by PGR88
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To: blam

I wonder who Walmart and Target employees donated to politically.


3 posted on 05/18/2022 12:33:34 PM PDT by calenel (Undo the Coup)
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To: blam

Freight is killing our company with it being the largest cost we have to incur on a monthly basis. So much co that operations has decided to open more locations in order to be closer to our customers who we service.


4 posted on 05/18/2022 12:34:05 PM PDT by BradtotheBone (When I die I want the GOP to be my Pallbearers, so they can let me down one last time.)
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To: BradtotheBone

Democrats profit only when everyone is miserable.


5 posted on 05/18/2022 12:38:52 PM PDT by FreeperCell
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To: PGR88

The stock market often doesn’t reflect reality. I wish more attention were paid to Main Street than the New York Wall Street Casino.


6 posted on 05/18/2022 12:47:56 PM PDT by Seruzawa ("The Political left is the Garden of Eden of incompetence" - Marx the Smarter (Groucho))
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To: blam

That’s 2/3 of the California price. Count your blessings.


7 posted on 05/18/2022 12:54:21 PM PDT by ProtectOurFreedom (Wanting to make America great isn’t an insult unless you’re trying to make it worse! ULTRAMAGA!!)
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To: Seruzawa

I sort agree. I do think main street is more central to the survival of America than Wall street. But millions of people have their retirement in 401Ks and Roths and such.

My 401K is down about $60,000 in the last year; I know it will go back up eventually (the market always does given enough time and I’m in a boring old index fund), but it’s harrowing and depressing and there’s always the risk that someone will freak out and cash out at the worst possible time (not me).

A very old and very successful stockbroker once told me ‘The market is the only place where people run out of the building when there is a sale on.” But then I have another decade or two before I need any funds.


8 posted on 05/18/2022 12:54:38 PM PDT by Republican in occupied CA (I will not give up on my native State! Here I was born, here I fight and die!!)
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To: PGR88

The $1B isn’t going to the truckers. It’s Biden-gas, Biden-tires, Biden-taxes and the like.

Even the stock market can see things not breaking even. Target won’t continue to pay this, and everyone knows it. Some truckers will retain business, if you want to call that a good thing.


9 posted on 05/18/2022 12:55:03 PM PDT by Empire_of_Liberty
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To: blam

“with a recession now just a matter of months.”

What does that mean?
* months away
* will last months

Crappy writing.

It is here NOW, not months away. And it’s going to last a long time


10 posted on 05/18/2022 12:56:13 PM PDT by ProtectOurFreedom (Wanting to make America great isn’t an insult unless you’re trying to make it worse! ULTRAMAGA!!)
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To: calenel

Target has been hard core lefty for 30 years.
HQ is in Minneapolis


11 posted on 05/18/2022 12:57:59 PM PDT by Zathras
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To: Republican in occupied CA

Keep in mind you are buying those funds cheaper.

The problem is, will it come back?


12 posted on 05/18/2022 12:58:27 PM PDT by eyedigress (Trump is my President! )
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To: blam

Incremental? More like excremental.


13 posted on 05/18/2022 1:00:28 PM PDT by rfp1234 (Comitia asinorum et rhinocerum delenda sunt.)
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To: blam

“with a recession now just a matter of months”. more like a matter of days. The DS and Democrats usual playbook plan of blaming white folks and Republicans ain’t working. Sad about the idiot kid who murdered the folks at the grocery store. but I would say racial murder is always with us, both black and white, and people are a hell of a lot more worried about losing everything, including food on the table, than the false flags that the democrats are raising.


14 posted on 05/18/2022 1:01:39 PM PDT by silent majority rising ( )
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To: PGR88
"Why would trucking stocks crash when Target just announced that Truckers are taking $1 billion more from them?"

Volume. Consumers aren't going to be able to afford the inflated prices, so volume is going to dry up. Think Recession.

Truckers will get more per load, and they will have higher expenses per load. But they won't have as many loads.

15 posted on 05/18/2022 1:03:10 PM PDT by DannyTN
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To: eyedigress

The problem is knowing when it hits bottom. My wife and I are sitting on $100,000 waiting for it.


16 posted on 05/18/2022 1:04:16 PM PDT by WASCWatch ( WASC)
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To: blam

$5.39 for premium this morning in Huntsville.


17 posted on 05/18/2022 1:05:16 PM PDT by Lakewood
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To: FreeperCell

Communism is shared misery.


18 posted on 05/18/2022 1:05:23 PM PDT by bray (The Vax is fake and deadly)
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To: PGR88

Believe it is because demand is slowing due to inflation. Netflix, for example and in addition to horrible (woke) content, gets hammered as people cut back on things they don’t need.

This is another example of a supplier to Apple, Foxconn warning of slowing demand due to inflation:

https://9to5mac.com/2022/05/12/apple-supplier-foxconn-warns-supply-demand/

It’s nice to have a new iPhone or Mac, but you don’t have to buy it.

So if people stop buying anything but essentials from Target, truckers who carry toys, furniture, electronics and the like would get hammered as demand dries up.

Not an economist, but that’s what in the business news.


19 posted on 05/18/2022 1:08:30 PM PDT by packagingguy
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To: BradtotheBone

Take a look at the increase in shipping for a rural family with both parents working. The cost of shipping themselves to their jobs and back each day is crucifying the family.


20 posted on 05/18/2022 1:11:13 PM PDT by hardspunned (former GOP globalist stooge)
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