Investors Should Hit the Brakes on Truckload Stocks
The electronic logging device mandate for U.S. truckers is looming, and somewhere around 65% of small fleets, which constitute most of the truckload carrier base, are waiting until the last minute to install the devices. They will have to install them eventually, however, or risk being taken off the road.
Because ELDs are far more exacting than paper logs, they force drivers to adhere more closely to hours-of-service rules, tempering the distance a truck can legally run. As a result, we expect widespread ELD adoption to reduce or potentially eliminate excess truckload capacity and revive pricing, which has been mostly sluggish since late 2015.
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