Analyst: Trucking, intermodal could benefit in port talks
Trucking companies and intermodal freight could get a small boost due in part to ongoing labor talks between port operators on the Gulf and East coasts and the International Longshoremen's Association that represents workers, a transportation analyst said.
Prior to the U.S. Maritime Alliance, which represents port operators and shipping companies, and the longshoremen agreeing to stay at the table Dec. 28, shippers planned for a strike and ports closure, David Ross, a transportation analyst with St. Louis investment firm Stifel Nicolaus & Co., wrote in a note to investors.
Retailers shipped their products early, or shipped them to western ports in preparation for a potential strike, Ross wrote. That could mean a bump to trucking and intermodal companies, such as Swift Transportation Corp. and J.B. Hunt Transportation Services Inc., that have to carry the freight back to the East Coast, he wrote.
J.B. Hunt has truck repair and administrative offices in Swatara Township, Dauphin County, and does a significant amount of work at the Norfolk Southern Corp. rail yards taking freight off the trains and trucking it to distribution hubs around the northeast.
Swift has a transportation terminal on Route 72 in Swatara Township, Lebanon County.
The alliance and longshoremen have extended contract negotiations twice after a labor deal couldn't be reached before the Sept. 30 contract deadline. The two sides have until Feb. 6 to reach an agreement, according to the longshoremen's website.
The National Retail Federation has raised alarm bells that a ports shutdown would have serious consequences for the economy and urged the two sides to work toward a solution.
"While a contract extension does not provide the level of certainty that retailers and other industries were looking for, it is a much better result than an East and Gulf Coast port strike that would have shut down 14 container ports from Maine to Texas," federation President and CEO Matthew Shay said in a statement.
"A coast-wide port shutdown is not an option," Shay said. "It would have severe economic ramifications for the local, national and even global economies and wreak havoc on the supply chain."
Still, the first quarter is expected to be fairly normal for the transportation and logistics sectors, depending on what happens with the weather, Ross wrote.
"We are not expecting significant outperformance by the group in reported results until (second quarter) at the earliest," he wrote.