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Dive Summary:
- Marten Transport reported on April 18 that it continued its stance of not cutting interest rates, a position it has maintained ever since early August.
- The hold comes as operating income for the refrigerated carrier fell to $12.3 million in the first quarter, down 58% year over year, according to an earnings release.
- The company reiterated its call for fair compensation for high-quality services, executive chairman Randolph Marten said once again.
Dive Insight:
An oversupply of carriers continues to cling to the market, which the incumbents say amounts to excess capacity and has put power in the hands of shippers.
With that strength, charterers have had “continued success in leveraging an overcapacity market to their advantage to achieve prices at or below cost,” PAM Transportation Services noted in its first-quarter earnings.
But many trucking companies, including Knight-Swift, say they refuse to go any lower.
Executives have sought to reassure investors that the downturn is part of a fare cycle. American Trucking Associations chief economist Bob Costello has called the recession a trucking recession. This comes as real GDP, however, rose 1.6% from the fourth to the first quarter, according to the US Bureau of Economic Analysis.
“There will come a time when prices and volume will come back,” JB Hunt intermodal president Darren Field said in a Q1 earnings call.