Barron's Streetwise The Freight Recovery is in Sight
Jan 17, 2025
Jonathan Chappell, a transport analyst at Evercore ISI, shares his expertise on the freight industry's recovery from its downturn. He discusses the impact of inflation and supply chain challenges, weaving in humor about mechanical bull pricing. The conversation highlights key stock insights, including shifts in consumer behavior and the implications of trade tariffs. Chappell emphasizes the need for balanced asset allocation amidst market volatility, all while showcasing the dynamic competition between major players like UPS and FedEx.
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Chimney Pipe Shortage
- During the pandemic, there were shortages of everything, including chimney pipes.
- Jack Howe bought chimney pipes at the highest price ever, illustrating the demand surge.
Freight Downturn
- Retailers over-ordered goods in 2021, fearing a repeat of the 2020 holiday shortages.
- This, combined with increased truck production, led to a prolonged downturn in freight profits.
Tariff Impact
- The expectation of Trump's tariffs caused a surge in imports as businesses stocked up.
- This demand pull-forward could be mistaken for a freight recovery, leading to overvalued stocks.