XPO: Top LTL Carriers Taking Freight Diversions From Yellow; Raising Valuation

On their second-quarter conference calls, XPO's less-than-truckload competitors Saia and Old Dominion reported experiencing a material uptick in shipments over the past few weeks, despite the otherwise sluggish demand backdrop (retailer destocking and soft industrial end markets). We suspect a meaningful portion of these gains reflect freight diversions from floundering LTL peer Yellow. Recall Yellow is facing a likely bankruptcy and we understand customers have been shifting freight to other carriers at a rapid pace.