Three Trucking Stocks Worth Monitoring Amid Industry Headwinds

The transportation and logistics sector faces mounting pressures from multiple directions. Weakening freight demand, persistent driver shortages, and supply-chain volatility have created a challenging environment for trucking companies. Yet within this turbulent landscape, certain organizations demonstrate operational prowess and financial discipline that may help them outperform peers. Three standout players—J.B. Hunt Transport Services (JBHT), ArcBest Corporation (ARCB), and Covenant Logistics Group (CVLG)—merit investor attention for their ability to navigate current industry difficulties.

Paradox of Performance: Why Trucking Stocks Are Gaining Despite Headwinds

A striking contradiction defines today’s trucking market. The Zacks Transportation - Truck industry currently ranks #211 out of 250-plus industries—placing it in the bottom 16%—yet has outperformed broader market indices over the past year. The industry gained 36.5% compared to the S&P 500’s 32.9% rise and the Transportation sector’s 13.4% appreciation. This suggests that select players are capturing value while the overall sector faces structural challenges.

The industry’s valuation reflects this tension. Trading at 15.6X EV-to-EBITDA on a trailing twelve-month basis, trucking stocks command a premium relative to the S&P 500 (14.87X) and the broader Transportation sector (11.74X). Over the past five years, the multiple has ranged from 6.79X to 15.75X, with a median of 10.39X, indicating current valuations are elevated compared to historical levels.

The Three Persistent Challenges Reshaping Trucking

Freight Demand Deterioration

The market for freight services continues to cool. The Cass Freight Shipments Index declined 4.5% year-over-year in February, marking the thirteenth consecutive month of contraction on a year-over-year basis. This sustained weakness signals that economic recovery remains fragile, and shipping volumes have not bounced back to pre-slowdown levels.

Labor Crisis Escalating

Driver availability represents one of trucking’s most intractable problems. According to the American Trucking Associations’ chief economist Bob Costello, the industry faces a projected shortfall of more than 160,000 drivers by 2030. This shortage constrains capacity expansion and forces companies to compete aggressively for talent, pressuring margins.

Shareholder Rewards Signal Confidence

Despite headwinds, industry leaders are deploying capital through dividends and share buybacks. J.B. Hunt recently raised its quarterly dividend, a move that underscores management confidence in long-term cash generation despite near-term uncertainty. This capital allocation strategy demonstrates that the strongest operators believe in their business models even as the broader industry grapples with cyclical challenges.

Spotlight on Three Trucking Stocks

Covenant Logistics (CVLG): Cost Control as Competitive Edge

Covenant Logistics operates a diversified platform encompassing asset-based expedited and dedicated services, irregular-route truckload capacity, and asset-light solutions including warehousing and freight brokerage. The company’s disciplined approach to cost management has resonated with analysts. CVLG carries a Zacks Rank of #2 (Buy), and its 2024 earnings estimate has been revised upward by 1.2% over the past 60 days—a rare positive signal in an industry facing consensus downgrades.

ArcBest (ARCB): Pricing Power and M&A Execution

Based in Fort Smith, Arkansas, ArcBest has leveraged favorable pricing dynamics to drive growth across both its asset-based and asset-light divisions. The strategic acquisition of MoLo Solutions bolstered ArcBest’s core truckload operations, expanding shipment capacity. Cost discipline initiatives further enhance profitability potential. Year-to-date performance reflects investor optimism: ARCB shares have surged 47.6% over the past twelve months. The stock currently carries a Zacks Rank of #3 (Hold).

J.B. Hunt (JBHT): Scale and Shareholder Returns

J.B. Hunt Transport Services maintains the broadest service footprint among the three, serving customers throughout the United States, Canada, and Mexico across a comprehensive transportation spectrum. The company’s commitment to rewarding shareholders through dividends and repurchases, combined with operational cost management initiatives, has supported stock appreciation of 19.4% over the past year. JBHT holds a Zacks Rank of #3.

Industry Outlook: Caution Tempered by Selectivity

The Zacks Transportation - Truck industry’s bottom-half ranking reflects analyst consensus that sector earnings will contract. The industry’s 2024 earnings estimate has declined 12.1% year-over-year, signaling weakening confidence in growth prospects. Historical analysis demonstrates that top-tier industries outperform bottom-tier industries by a factor exceeding 2-to-1, underscoring the structural headwinds facing trucking.

However, this aggregate weakness masks significant divergence among individual operators. Companies with fortress balance sheets, pricing discipline, and operational efficiency can expand market share while weaker competitors face pressure. The three stocks highlighted here each demonstrate competitive advantages likely to insulate them from the worst outcomes as the industry cyclically recovers.