THE DAILY

Tuesday, May 12, 2026

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The Daily

Moody’s cuts Wabash debt rating for third time in a year

Wabash’s earnings have evaporated, the cash burn keeps running, and the credit market is no longer giving the trailer maker the benefit of the doubt.

Moody’s on May 5 cut Wabash National’s corporate family rating to B3 from B2, the third downgrade in 12 months, almost to the day. The B1 cut landed May 7, 2025. The B2 cut followed in November. B3 sits six notches below investment grade. S&P Global cut its own Wabash rating to B+ last May and to B after Moody’s November move. The credit story is no longer ambiguous.

The numbers explain the action. Wabash’s debt/EBITDA ratio was 1X at the end of 2023. Moody’s now expects it to sit at 6X at the end of 2027, even with an improving trailer market. Cash and cash equivalents fell to $31.9 million at the end of 2025, down from $144.5 million a year earlier. Trailer shipments dropped to 5,378 units in the first quarter, off from 5,901 in the fourth quarter of 2025 and a fraction of the 13,670 the company built in the third quarter of 2022. Transportation Solutions posted a $37.3 million operating loss for the period.

CEO Brent Yeagy used the earnings call to point at the turn. The backlog ended the quarter at $837 million, up 19% sequentially, the largest quarter-to-quarter backlog gain ever recorded for a Wabash first quarter. “Both our customers and our visibility continues to improve,” Yeagy said, framing 2027 as the year “spot rates, contract rates, capacity and demand all are coming together” to push fleets back toward replacement orders. Moody’s isn’t buying the 2026 piece of that timeline. The agency expects revenue slightly down this year, with negative earnings and negative free cash flow.

The bigger risk is short-term. Wabash leans on a $350 million asset-based revolver that expires in September 2027, and Moody’s flagged the refinancing exposure as a near-term concern. The cycle bottom and the debt wall are arriving at the same time.

So What? Wabash’s backlog is the cleanest leading indicator that fleets are starting to plan capacity again. If you run a carrier, equipment pricing will move before your CFO has a budget for it. If you’re a shipper, that supplier-side stress prints in your next contract cycle as carriers price for two years of deferred replacement equipment. Build it into the 2027 bid model now, not after rate cards reset.

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Top Stories

FAA clears FedEx MD-11 fleet to return to service

FedEx ran its first commercial MD-11 flight since early November on Sunday, after the FAA approved Boeing’s protocol for returning the freighter to service. A short test flight in and out of Memphis on Saturday preceded full commercial rotations on Sunday, with one MD-11 routing Memphis to Los Angeles and a second to Miami. Airlines must replace the bearing in the engine-pylon lug nut that NTSB investigators tied to the fatal UPS Flight 2976 crash before each aircraft returns. FedEx plans to phase its 29 MD-11s back in gradually as planes cycle through Memphis and Indianapolis maintenance hubs and pilots complete refresher training. The carrier intends to fly the type through 2032.

So What? Capacity is coming back, but the maintenance-cycle bottleneck means it phases in, not floods in. Air cargo shippers routing through Memphis should expect a steady ramp through the summer rather than a single restored-network moment, and rate relief on FedEx-served lanes will follow the maintenance throughput.

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Hub Group delays Q1 reporting, will restate 2023 and 2024 results

Hub Group expanded the scope of its accounting cleanup Tuesday, saying it will delay first-quarter 2026 reporting and restate full-year 2023 and 2024 financials on top of the previously announced restatement of the first three quarters of 2025. The original $77 million understatement of purchased transportation expenses represents roughly 2% of 2025 revenue; the company says there is no expected impact on cash or operating cash flow. Hub has until Sept. 14 to regain Nasdaq filing compliance. In a separate operating update, Hub said intermodal volumes reflected steady demand, brokerage volumes fell on a yield focus, and the company won “significant new business” in managed transportation and final mile. Shares were down 9.2% in premarket trading.

So What? When an intermodal incumbent misses filing deadlines, equity sentiment drops faster than the operating story warrants. The stable intermodal commentary inside the same release tells a different story than the stock chart will today.

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Benchmark diesel barely moves as futures push higher on tight inventories

The DOE/EIA benchmark used for most fuel surcharges fell 0.1 cents to $5.639 a gallon this week, the smallest move possible, after last week’s 28.9-cent surge. Underneath that flat retail print, futures markets are heating up: Brent gained 3.07% Tuesday morning to $107.41 a barrel, and ULSD on CME jumped 9.43 cents, or 2.38%, to $4.0692 a gallon. EIA data shows nationwide ULSD stocks at 93.14 million barrels for the week ended May 1, the lowest first-week-of-May reading in 10 years outside the pandemic years. Stocks have drawn down 14.8 million barrels, or 13.4%, since the Iran war began in March. Energy economist Philip Verleger wrote in his weekly note that “based on historical data, crude should now trade for around $200 per barrel.”

So What? Surcharge stability is temporary cover. Carriers and brokers should model a second leg higher on diesel through Q3 if Hormuz stays closed and ULSD draws continue at recent pace, because the futures curve is already pricing the inventory squeeze.

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Chicago man gets five years in $10 million freight fraud scheme

A federal judge in the Northern District of Illinois sentenced Aivaras Zigmantas, 41, to 60 months in federal prison after he pleaded guilty to wire fraud tied to a $10 million cargo theft ring. Prosecutors said Zigmantas used multiple aliases between 2020 and 2023 to impersonate real and fictitious carriers and brokers, convincing victims to release shipments of liquor and commercial-grade copper. The group intended to steal at least $14.6 million in goods and successfully diverted more than $10.1 million before the operation was stopped. The case was prosecuted under the Department of Justice Trade Fraud Task Force, and federal officials recently stood up a new National Fraud Enforcement Division to pursue this category of crime.

So What? Modern cargo theft starts with identity, not force. Until carrier onboarding catches up to how fast these networks spin up fake authority profiles, the exposure stays in front of the verification controls most shippers and brokers have in place today.

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From the Research Desk

What We’re Watching

▸ Wabash’s backlog trajectory through Q2. The $837 million order book is the largest quarter-to-quarter Q1 gain in company history. If the sequential build continues, that’s the cleanest signal that fleets are budgeting for replacement equipment in 2027.

▸ Next week’s EIA ULSD inventory print. Stocks are down 14.8 million barrels since the Iran war started. Another draw of that size and surcharge resets land sooner than carriers have priced in. Watch the Wednesday report.

▸ Hub Group’s path back to Nasdaq compliance. The Sept. 14 deadline is real, and the restatement scope just expanded to 2023 and 2024. How quickly Hub closes the filing gap will shape how the rest of the intermodal complex prices accounting risk into 2026.

That’s your Daily for today. See you tomorrow.

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