Knight Earnings: Truckers Navigate Retail Destocking and Loose Capacity

Diversified trucking and logistics specialist Knight-Swift's first quarter revenue-before-fuel fell 10% year over year. Recall revenue swung negative last quarter following exceptional growth throughout 2021 and most of 2022. In short, retail-sector restocking has retrenched on elevated inventory levels, and industrial end markets started softening by the end of 2022, thus pressuring volumes across the board. Also, truckload spot rates corrected meaningfully throughout 2022 and contract pricing is now correcting (albeit LTL pricing is holding up better) as the truckload capacity crunch has dissipated. Overall, the current trucking downcycle is not unexpected and we've already been baking in a pullback in 2023.