FreightWaves Today | October 20

Malcolm Harris (0:24)

Welcome to FreightWaves Today, of course, joined by Julie Van de Kamp, I am Malcolm Harris. Another episode and another great hour of Comments Ahead. Hi, Julie.

Julie Van de Kamp (0:35)

How's it going?

Malcolm Harris (0:36)

I'm doing well. We are the week before F3.

Julie Van de Kamp (0:39)

Getting close.

Malcolm Harris (0:40)

Things are about to be in full swing, but other than that, I'm good. Getting ready, what about yourself? How are you?

Julie Van de Kamp (0:46)

Yeah, getting ready for F3. Incredibly excited about that. This is a busy week. It's like we're prepping for our Superbowl, so lots to do.

Also, big week with earnings, right? So we've already had JB. Hunt and Prologis announce their earnings. We've had sort of a pre-release, I guess, warning, I don't know what you call it.

Malcolm Harris (1:09)

I'm looking for the word as well.

Julie Van de Kamp (1:10)

Admonition from Werner that they are going to miss based on some cost pressures. But we track about 81 companies, 80 companies throughout earnings season at Sonar and write a set rep on it, obviously talk about it on the show as well. And by the end of the next seven days, we will have heard from almost 30 of them. So lots coming out in the next couple of days regarding earnings that we'll be able to talk about, that will be really good. Obviously, we've heard about the cost pressures from JB Hunt and Werner's announcement yesterday. We'll hear from KNX tomorrow. Yeah, tomorrow. So that'll be really telling. I'm kind of expecting some of the same from them regarding cost pressures, but we will see that that will kind of help to round out a little bit of understanding Q3 from the trucking aspect, which will be interesting. But tomorrow, we'll hear from Triumph, CSX, KNX, Tesla, Wabi, I think some others as well. So that will be a big day regarding earnings.

Then I think who else have we heard from? I think some others have done some pre-releases, like Freight Car America did a pre-announcement talking about rail car deliveries being significantly down in Q3, primarily all related to one customer. So that was interesting to see how far they believe that they'll miss. And then FreightOS actually, which is for those who don't know, an online booking and pricing platform for international freight, mostly cargo, air cargo and ocean. But what's interesting about that is their numbers really work as a pretty good read on international air and ocean rates.

So without a huge amount of increased volume, we did see a pretty huge amount in bookings value, right? So 30% increase in bookings value, about 15% of that attributed with volume, but the rest of it really attributed with rates going up and the same cost pressures that we're seeing, just the reverse side of trucking, right? Where rates are up, capacity is tight, fuel prices are up, customs clearance, all of those things all go into that bookings value. It being up pretty significantly was an interesting read for me as well.

Malcolm Harris (3:20)

No, definitely. Per Craig Fuller, for those that don't know, this is our playoffs, guys. When it's earnings season, you are always going to get all the information here at FreightWaves Today. Speaking of information and speaking of today, we have a great show coming up today. We're joined by two great guests. The first is going to be the president and COO of, of course, Bot Auto, that is Mr. Brett Suma. Brett is fantastic, one of the sharpest minds, saying the space. Excited to have him here on FreightWaves Today.

And talk a little bit about the scale of driverless trucking. Him and his team at Bot Auto are doing some incredible things. Excited to dive into that. And then fresh diesel numbers are out right now. And who else other than the man, FreightWaves' very own, our editor at large, John Kingston, is going to join us to talk about diesel, the CH. Robinson verdict, and what to watch out for this earnings season. Between John and Brett, we're going to have a fantastic show. But before we get to them, it's time to check out the headlines with the Morning Minute.

Julie Van de Kamp (4:21)

We kick things off with a stark profit warning from Werner Enterprises that underscores the brutal cost pressures squeezing carriers in the early stages of the market recovery.

The Omaha-based truckload giant cut its third quarter adjusted earnings per share guidance to just 15 to 16 cents on Monday, drastically missing Wall Street's consensus estimate of 36 cents.

Werner flagged 18 cents in cumulative cost headwinds from elevated diesel fuel prices, higher driver recruitment and retention expenses, and a reserve adjustment for prior insurance claims. The company forecast revenue of $946 million to $951 million for the period, only slightly below analysts' expectations. While carriers like Werner are finally raising rates for the first time following a nearly four-year downturn, profitability is still being heavily compressed by early upcycle cost inflation. Werner will report full third-quarter results on October 27th after the market closes, and shares were down 1.1% on Monday following the announcement. Meanwhile, a massive drug seizure at the border is highlighting the serious risks facing commercial freight operations along the U.S.-Mexico corridor. US. Customs and Border Protection Officers discovered nearly $30.4 million in suspected methamphetamine inside a commercial salt shipment on October 12th at Laredo's World Trade Bridge. Officers recovered nearly 3,400 pounds of suspected meth from an international tractor trailer. They found 76 bags containing the suspected narcotics inside a trailer that looked like it was carrying salt. Authorities subsequently released the driver and equipment while federal investigators continued examining the case. Officials have not publicly established whether the driver or trucking company knew about the concealed drugs. Homeland Security has taken over the investigation.