Dive Brief:
- Transport company Daseke Inc. announced in its Q1 earnings release on May 9 that it is lowering its full-year earnings guidance by up to $25 million.
- CEO Jonathan Shepko told analysts earlier in May that the soft freight market was behind the company’s decision to drop its previously announced full-year estimates of adjusted EBITDA of $235 million to between $210 million and $220 million. He added the move is consistent with announcements made by other carriers in Q1
- "Looking ahead into the remainder of 2023, we expect freight market conditions to remain challenging, without clear visibility into the timing and magnitude of a recovery in the broader economy,” Shepko said in an earnings release.
Dive Insight:
Shepko said the Texas-based flatbed carrier does not expect to see the traditional improvements in the freight market during the spring and summer.
“We're looking at normal seasonality trends, and look, it's frankly a mixed bag,” Shepko told analysts during an earnings call. “We typically by April really see a noticeable uptick in utilization, loaded trucks even rates and typically rates from March to April increase 10% to 15%.”
He said the company is “just not really seeing the seasonal uplift.”
Shepko added there are signs freight volume is improving but not enough that rates could rise anytime soon.
Many trucking companies have forecasted a weak freight market in Q2 and beyond.
“[D]emand is significantly less than it has been in the last two years along with significant pressure from many shippers to reduce freight rates while operational costs continue to rise,” Heartland Express CEO Mike Gerdin said in an earnings release.
Schneider National President and CEO Mark Rourke said on a Q1 earnings call that a moderate freight recovery may be on the horizon in the second half of the year, but uncertainty loomed.
“The inventory positioning across many of our customers is making solid progress, but the replenishment cycle remains spotty and delayed compared to our original expectation,” Rourke said.
