Fedex Freight spins off, Amazon announces its entry into the LTL carrier space, and Arcbest announces an early GRI. Is this the biggest news month LTL has seen? Follow the Freightonomics Podcast Other FreightWaves Shows Learn more about your ad choices. Visit megaphone.fm/adchoices

LTL’s big month

Freightonomics

# Full Transcript

**Podcast:** Freightonomics

## Participants

- **Zach Strickland** (FreightWaves)
- **Mike Bowden-Distel** (FreightWaves)

## Transcript

Welcome to the second hour of FreightWaves today, also known as Freightonomics on Thursdays. I'm Zach Strickland, head of Freight Market Intelligence, and joining me today as my special fill-in co-host, probably will happen a few more times, Mike Bowden-Distel, our head of Intermodal and Ocean Solutions. And, you know, Mike, we've been covering the LTL stories a lot, and I feel like this is really my bread and butter.

You know, I came from LTL, 15 years of LTL pricing, as well as back-end analytics, financial analysis. So this is really my love language in terms of a career. So we're going to break that down today a little bit, and I know that your space specifically, the financial services sector, you came from Stiefel, where all the financial market analysts are really kind of licking their chops at the LTL carriers and what all this means. We've got Amazon, we've got FedEx.

It's really LTL's big month of stories. I feel like we've kind of been slow playing it a little bit in the LTL sector, talking about the truckload market so much because it is extremely interesting, but it also has a very deep connection to the LTL space. For those of you that know LTL know that all LTL networks are supported by a backbone of truckload moves between hubs, and sometimes they're spokes. But as the truckload market turns, so does the LTL market eventually go that way,

although it does tend to be a little bit less volatile in terms of rate movement. But Mike, what have you been hearing out in the space over the last week? Do you agree with my sentiment about LTL kind of taking over the headlines? I think it's been one of the biggest sectors this year. I mean, you just look at the stock price performances, and right before that announcement from Amazon, that whole LTL space was up about 60% year to date,

and trading at record valuations, and those are valuations that tend to be high because it's such an attractive space for the incumbents to be in. All the carriers basically are incumbents, with the exception of what we saw from Amazon. So that 5% pullback or so that we saw yesterday still doesn't take away from the fact that it's really been a hot sector. And I would say really the topic of the hour among investors is this FedEx freight spinoff,

which was spun off into its own public company, just strictly the LTL pure play as of June 1st. And initially, the stock went down as it was taken public in the spin. But then subsequent to that, it's run up as more analysts have published reports on it. So there is some back and forth there in terms of is there a structural difference

between FedEx freight and Old Dominion in terms of, let's say, margins, margins, where FedEx freight has about a 12% operating margin, looking to take that to 15% in the relatively near term. But still a far cry from Old Domini...

LTL’s big month

Transcript

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Every day you wait, your competitors are finding
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LTL’s big month

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.