Trucking firm Knight-Swift Transportation Holdings Inc. warned of a rapid slowdown in the freight market, an ominous sign for the economy as shippers grapple with a lackluster peak season ahead of the holidays.
Businesses are slowing their orders on concern consumer demand won’t hold up, and that means less freight to carry, especially for smaller truckers, the company said late Wednesday as it reported quarterly earnings. That’s leading to a decline in the prices transportation companies can charge, and their operating costs are still soaring, Knight-Swift said.
Knight-Swift also cut its annual profit forecast to as low as $5.17 a share, short of the $5.40 average of analysts’ estimates compiled by Bloomberg.
“These muted trends have continued into October as supply chains appear to be catching up and adjusting for uncertainty in consumer demand,” Chief Executive Officer David Jackson said in a statement. “If these trends continue, we expect truckload supply to rapidly exit the market.”
The comments underscore the sudden deterioration in shipping demand, which had boomed earlier in the pandemic and into the early part of this year. But growing concerns over the economy and increasing retail inventories following extended supply-chain challenges have led many companies to pull back.
Knight-Swift joins rival trucking company JB Hunt Transport Services Inc., whose CEO John Roberts said Tuesday on a conference call that there needed to be “an increased level of caution and awareness on broader demand trends and economic activity.”