Trucking company profitability tends to lag the freight cycle: In 2018, contracts got signed when demand was hot, and those rates have helped to support profitability even with spot freight rates deep under water. In Q4, the core carrier tracked by ACT posted all-time record margins at 7.0%, up 270 basis points (2.7%) year over year. While Q1 is always a letdown from Q4, it still ranked as the fifth best all-time profitability quarter at 4.9%, but up just 30 basis points (0.3%) above increasingly tough year-ago comparisons. With spot rates pulling contract rates lower, expect profitability to deteriorate into the end of 2019 and into early 2020 as the supply-demand imbalance favors shippers.
Trucking company profitability tends to lag the freight cycle: In 2018, contracts got signed when demand was hot, and those rates have helped to support profitability even with spot freight rates deep under water. In Q4, the core carrier tracked by ACT posted all-time record margins at 7.0%, up 270 basis points (2.7%) year over year. While Q1 is always a letdown from Q4, it still ranked as the fifth best all-time profitability quarter at 4.9%, but up just 30 basis points (0.3%) above increasingly tough year-ago comparisons. With spot rates pulling contract rates lower, expect profitability to deteriorate into the end of 2019 and into early 2020 as the supply-demand imbalance favors shippers.
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