Stock Firm Sees Overcapacity Cutting Profits in LTL Sector

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large investment firm has fired the first flare signaling trucking’s strong financial run could be in jeopardy, and warned that overcapacity is beginning to appear in the less-than-truckload sector.

Two analysts for Morgan Stanley earlier this month lowered their 2005 earnings estimates for several fleets and downgraded their stocks, claiming that the greater availability of LTL capacity would lower prices for the fleets. They also warned that overcapacity could reach the truckload sector next year.

The analysts said they lowered their assessments of the LTL stocks after conducting a survey of 210 fleets in December that led them to believe “that LTL customer pricing will fall far short of expectations in 2005 and 2006.”

For the full story, see the Jan. 17 print edition of Transport Topics. Subscribe today.