Normalizing Truckload Backdrop Becomes More Evident in Knight-Swift’s Q3

Diversified trucking and logistics specialist Knight-Swift’s third-quarter revenue-before-fuel grew 16% year over year (it was up 49% last quarter). Although growth eased materially, overall operating trends didn't deviate drastically from our expectations. We've been expecting easing retail end-market demand and a pullback in truckload spot activity and rates to flow through results, with LTL pricing holding up slightly better in the near term; and that's largely what's happening. In fact, TL spot conditions have been normalizing off historic highs throughout 2022, and we still expect industrywide contract rates (especially for TL and brokerage) to flip negative on a year-over-year basis by first-quarter 2023.