| The Daily // Fri 10.23.26 | View in browser → |
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The Daily
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ANNOUNCEMENTS
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Ryder sees no pre-buy surge ahead of EPA ’27 but may need more fleet
Ryder says it has not seen a pre-buy surge ahead of the EPA’s 2027 engine rules, but its CEO told analysts the company may need to add fleet as the rules approach, according to John Kingston’s reporting on the third-quarter earnings call. The 2027 nitrogen oxide rules will affect anyone who buys new heavy-duty vehicles, and Kingston writes that the EPA has since amended its initial rule, including noncompliance penalties and derate provisions. CEO John Diez said Ryder has not seen a pre-buy surge with the change in technology. Tom Havens, president of Ryder’s Fleet Management Solutions, said it is well understood that price increases are coming in 2027 and that some customers bought ahead, but not to any large extent.
Citizens JMP analyst Jeffrey Kauffman said adding new tractors will be tough over the next six to nine months because of the EPA mandate. Diez said Ryder is confident it can grow the fleet and has already started bringing in equipment. He said utilization has not reached the levels seen after COVID, when it peaked at 81.6% in the second quarter of 2022, but will if Ryder does not add fleet.
Ryder’s retail share of used vehicle sales was 61% in the quarter, and Diez expects it to exceed 70% in 2027. The company had forecast a $40 million used vehicle gain for the year and now projects $50 million to $60 million. Diez said the thin used inventories Ryder expects later next year give it its biggest hedge against market forces. Ryder shares rose 10.49% to $265.53 Thursday, still below the 52-week high of $284.25 set June 12.
Diez said Ryder will give a full-year 2027 look on its fourth-quarter call. The article notes that buying EPA ’27 vehicles now carries uncertainty about the final rule, and a Ryder executive cautioned that the company’s driver-market experience is not necessarily indicative of the broader competition for drivers.
Norfolk Southern profits rise on higher volume and revenue
Norfolk Southern’s third-quarter operating income rose 5% to $1.15 billion on revenue up 14% to $3.52 billion, a third-quarter record, according to Trains.com staff reporting. Fuel surcharge revenue accounted for 8 of the 14 points of revenue growth, and overall volume rose 3%, with merchandise, intermodal and coal each up 3%. Earnings per share rose 7% to $3.37. The operating ratio was 67.4%, up 2.8 points largely because of higher fuel costs, and 65.4% adjusted for East Palestine derailment costs and merger expenses tied to Union Pacific. CEO Mark George said the tightening truck market helps rail compete and that the railroad captured increased customer demand.
Network metrics improved from the second quarter, with terminal dwell up 3%, train speed up 5% and on-time train originations up 18%. Year over year, intermodal service composite fell to 84% from 92% and merchandise trip plan compliance fell to 74% from 80%.
Ryder raises 2026 outlook as used vehicle sales lift third-quarter results
Ryder raised its full-year 2026 outlook on strong third-quarter results, according to John Kingston’s first-look reporting. It lifted its non-GAAP return-on-equity forecast to 18% to 19% from a flat 18%. Revenue rose in every segment: Fleet Management Solutions up 10%, Supply Chain Solutions up 9% and Dedicated Transportation Solutions up 6%. Earnings before tax rose 21% at Fleet Management and 7% at Supply Chain but fell 5% at Dedicated. Used vehicles sold rose to 5,100 from 4,900, with used tractor prices up 19% year over year and used truck prices up 5%.
Ryder attributed the Dedicated decline to lower operating revenue and a prior-year workers’ compensation insurance benefit, partly offset by cost savings. Citi’s Ben Mohr said Dedicated is likely facing elevated driver hiring costs, wages and bonuses as the driver market tightens.
Knight-Swift again eyes big rate increases as new bid season nears
Knight-Swift reported third-quarter adjusted earnings of 83 cents a share, 51 cents above the year-ago quarter and 7 cents above analyst expectations, according to Todd Maiden’s reporting. Revenue was $2.2 billion, up 14%, or 8% excluding fuel. In truckload, revenue per tractor excluding fuel rose 11% and revenue per loaded mile excluding fuel rose 10%, and the adjusted operating ratio was 89.2%, 700 basis points better year over year. The company guided to a truckload operating ratio of about 85.9% in the fourth quarter and earnings of 78 to 84 cents a share, against an 82-cent consensus. CEO Adam Miller said Knight-Swift will probably start the bid season asking for low-to-mid double-digit increases.
Miller said spot pricing trended better than public indicators and stayed well above contractual rates, and that tender rejection rates are running two to three times the broader market measures. The company also said sourcing quality drivers is as challenging as it has been in years.
Why one zero-emission truck dealer wants big rigs to wait
Johannes Ariens, CEO of Range Zero Emissions, argues that Class 8 electrification will follow on its own once small fleets switch to electric Class 4 through 6 trucks, according to Thomas Wasson’s reporting. Ariens says medium-duty trucks can scale now on Level 2 chargers, and that a fleet driving fewer than 150 miles a day can charge overnight, while a Class 8 truck cannot charge on Level 2. Range, a dealer group that sells only zero-emission commercial vehicles, became an authorized dealer for Hyundai’s XCIENT Fuel Cell Class 8 truck in August, with Washington as its primary territory. Ariens named FedEx, Rivian and Amazon as medium-duty buyers and says incentives should favor small businesses with five trucks or fewer.
California’s HVIP program has delivered more than $1 billion since its 2009 launch, per Gov. Gavin Newsom’s office, and Washington’s Zero-Emission Incentive Program launched April 29 with $112 million in vouchers. ATA data as of June 2025 show 91.5% of nearly 580,000 active U.S. motor carriers operate 10 or fewer trucks.
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| Time | Guest | Topic |
|---|---|---|
| 12pm | Paul Tonsager | CEO and Founder of Integrated Multi-Modal Solutions |
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Cass Q3 Earnings Soar: 19% EPS Growth & Freight Market BoomCass Information Systems CFO Mike Normile explains how rising freight rates, fuel surcharges and higher interest rates fueled a 19% increase in earnings per share for the third quarter. |
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How Triumph Financial’s CEO Beat the Longest Freight RecessionTriumph Financial CEO Aaron Graft discusses how the company achieved 38% transportation revenue growth during one of the longest freight recessions in history. |
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Ryder’s 2027 outlookRyder will give a full-year 2027 look on its fourth-quarter call. Watch for fleet additions and retail used vehicle share, which Diez expects to exceed 70% next year. |
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Knight-Swift’s bid seasonMiller said the company will probably start bids asking for low-to-mid double-digit increases. Watch whether contract rates follow the spot premium. |
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Norfolk Southern’s service metricsIntermodal service composite fell to 84% from 92% a year ago even as the network improved from the second quarter. Watch whether the sequential gains hold. |
