Trucking stocks slid Tuesday, after a less-than-truckload carrier said it will close its doors, citing high fuel costs, tight credit markets and the overall economic downturn.
Delanco, N.J.-based Jevic Transportation Inc. said Monday they will shut down after 27 years. The carrier, which has about 1,500 employees, was sold by Saia Inc. to private investment firm Sun Capital Partners two years ago.
Wachovia analyst Justin B. Yagerman said he expects high fuel prices will continue to hurt truckers this year and speed up the rate at which carriers go out of business. However, Yagerman noted that as more carriers close their doors, the remaining truckers will benefit as they are able to expand their businesses amid soaring diesel costs.
The Department of Energy said the average price of on-highway retail diesel jumped 3.8 percent last week to $4.50 a gallon. The price stands 60 percent higher than a year ago.
Yagerman said Jevic's closure has the potential to benefit truckload and less-than-truckload carriers, as well as truck brokers including C.H. Robinson Worldwide Inc. and Landstar System Inc.
Truckload carriers generally dedicate an entire trailer to one customer and move the freight directly from the shipper to the receiver while less-than-truckload carriers fill their trucks with freight from a variety of sources and might re-sort and redistribute it at a company terminal along their route.
Stephens Inc. Thom Albrecht said he believes between four and six more less-than-truckload carriers are currently at risk of shutting down, but noted that the truckload sector is more vulnerable to soaring fuel costs and troubled credit markets.
Among less-than-truckload carriers YRC Worldwide Inc. lost 45 cents, or 2.4 percent, to $18.72 and Saia fell 5 cents to reach $14.35 in midday trading.
Old Dominion Freight Line Inc. fell 89 cents, or 2.9 percent, to $30.18.
Truckload carrier Werner Enterprises Inc. slipped 20 cents to $18.44, and Knight Transportation Inc. fell 35 cents to $17.79. Ryder System Inc. lost $1.05 to $74.14.
C.H. Robinson fell 66 cents to $64.91, while Landstar System retreated 83 cents, or 1.5 percent, to $53.26.
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