NEW YORK, NY, Oct 08, 2010 (MARKETWIRE via COMTEX) -- The trucking industry represents a very important component of the US economy. According to the US Bureau of Economic Analysis, the trucking industry accounts for about 5% to the Gross Domestic Product each year. The trucking industry was hit exceptionally hard during the economic crisis with nearly 2000 companies going out of business and others reducing the size of their fleets. Only in 2010 has demand volume begun to rise, giving truckers improving fundamentals. The Bedford Report examines the outlook for companies in the Trucking Industry and provides research reports on Con-way, Inc. (CNW 30.51, +0.13, +0.43%) and JB Hunt Transport Services, Inc. (JBHT 35.49, +0.07, +0.20%) . Access to the full company reports can be found at:
In recent quarters, remarks from major trucking companies suggest that shipment weights and load count are both increasing as various markets recover. Truck freight volume, however, remains quite erratic. The trucking industry growth is measured by the American Trucking Association Tonnage Index, which is a survey of a wide variety of trucking and shipping companies. The adjusted For-Hire Truck Tonnage Index fell 2.7 percent in August -- the biggest monthly drop in over one and a half years.
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In the past year, truckers such as JB Hunt Transport Services and Con-way have begun to show signs of recovery on their balance sheets. By the end of 2009, JBHT had greatly reduced its level of bank debt to $565 million. In 2007 the level of bank debt stood at more than $910 million due to the company's decision to greatly expand its ownership of intermodal containers, along with significant stock buybacks. Meanwhile Con-way has generated $80.4 million in cash on net income of $21.4 million over the last year. This implies CNW turned 1.7% of its revenue into Free Cash Flow.
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SOURCE: The Bedford Report