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– Bank of America is cautious on trucking over concerns in the short term on negative sentiment and rising net truck orders.

– Analyst Ken Hoexter: “As net orders neared peak the prior two cycles, shares of large truckload carriers fell rapidly (with KNX and WERN declining 40% and 20% on average from peak levels). The 12-month order trend rarely stabilizes at replacement, with the last two cycles posting orders that added excess supply as carriers moved to capitalize on historically strong rates. While we concur with carriers that there remains a lack of currently available drivers, the structural constraints feared by the electronic logging device rollout, shifting Hours of Service rules, or rising insurance costs the past few cycles demonstrated the industry’s ability to overcome challenges. We are concerned that truckers will look to seat trucks by increasing driver wages, a headwind as rates near peak.”

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