MW This trucker is finally seeing signs of a bottom, and providing a boost to transport stocks
By Tomi Kilgore
Old Dominion Freight says increasing weight per shipment and surprisingly strong manufacturing data may suggest the three-year freight recession is finally ending
Old Dominion's stock surged into record territory after saying a long freight recession may finally be ending, and is helping provide a boost to the overall transportation sector.
Shares of Old Dominion Freight Line were soaring Wednesday, and helping provide a lift to the entire transportation sector, after the trucking company provided reason to believe the years-long freight recession was finally coming to an end.
"I think we've seen some positive signs that we've been really pleased with" over the past couple of months, said Chief Financial Officer Adam Satterfield, according to an AlphaSense transcript of a call with analysts.
This could also send a bullish message about the economy, as well as the rest of the stock market.
The company has been trying, but unable to, make a call on when the demand environment was finally going to turn. To do so, there would have to be a meaningful and sustained rebound in weight per shipment, which Satterfield said is "really the indicator within our business."
The good news, he said, is that in the fourth quarter, that indicator "really increased."
Old Dominion's stock (ODFL) shot up 9.9% to close at a one-year high Wednesday, and was the Dow Jones Transportation Average's DJT biggest gainer. The stock's $18.77 price gain added about 112 points to the price of the transports tracker, which closed up 456.23 points, or 2.4%, at a record high, on a day that the S&P 500 index SPX fell 0.5%.
The Dow transports are seen by many on Wall Street as a barometer for the health of the overall economy, given that they move and deliver what other companies make. If things that are made aren't being moved, then the economy may not be as healthy as it appears on the surface.
For the fourth quarter, Old Dominion said weight per shipment came in at an average of 1,486 pounds per less-than-truckload shipments for the fourth quarter, which was down from 1,501 pounds in the same period a year ago, but up from 1,458 pounds in the third quarter.
To break down the quarter, the company said it was around 1,450 pounds in October, then rose to 1,489 pounds in November and then to 1,520 in December. The company said the 2.1% increase from November to December was well above the 10-year average gain for that period of 1%.
After what Satterfield referred to as a "three-year freight recession," he said "hopefully, I'm finally seeing the turn that we've been predicting for the last couple of years take shape."
Besides just the apparent turn in the weight-per-shipment indicator, there was economic data released on Monday - the Institute of Supply Management's manufacturing survey - that showed that the manufacturing sector saw growth for the first time in nearly a year, while economists were expecting another month of contraction.
"Over time we've seen that ISM is a leading indicator, and typically, a couple of months after that influx positive, we see volumes somewhat do the same," Satterfield said.
That would help explain why Old Dominion's stock has soared 20.4% since the ISM data was released, which puts it on track for the biggest weekly gain since it shot up 21.7% during the week ended Dec. 19, 2008.
And it's not just Old Dominion. The Dow transports have powered 1,415.25 points, or 7.7%, higher this week, to a third straight record close, and the biggest weekly point gain ever. In comparison, the Dow Jones Industrial Average DJIA has tacked on 1.3% this week while the S&P 500 index SPX has slipped 0.8%.
Also read: This 100-year-old stock-market indicator just flashed a buy signal. Here's how investors should read it.
The Dow transports' trucking components aren't the only ones that got a nice boost from the ISM data. FedEx shares $(FDX)$ have surged 12.5% this week to a record close on Wednesday. They have also climbed 19.2% during an eight-session win streak, the longest such streak since the nine-day streak that ended Sept. 19, 2024.
And shares of Southwest Airlines $(LUV)$ have rallied 10.7% this week, to close Wednesday at the highest price since October 2021, after flying 13.3% last week.
-Tomi Kilgore
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(END) Dow Jones Newswires
February 04, 2026 17:05 ET (22:05 GMT)
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