Susquehanna says TL recovery requires kick start from demand

Group 1: Market Sentiment and Trends - Analysts are increasingly positive about a truckload recovery, attributing this to heightened regulatory enforcement that is thinning the supply side, but a sustained upcycle will require a significant increase in demand [1] - Early signs of improvement in the truckload supply/demand balance are noted, with an "abnormally super-seasonal" jump in spot rates, although demand is still only experiencing normal seasonality [2] - Shares of Knight-Swift Transportation, Schneider National, and Werner Enterprises have risen nearly 40% on average since the week prior to Thanksgiving, coinciding with a sharp increase in tender rejections and spot rates [3] Group 2: Capacity and Regulatory Impact - The Van Outbound Rejection Index indicates a tightening truckload market, reflecting the number of dry van loads being rejected by carriers [4] - The National Truckload Index shows that spot rates have increased during the peak season due to new constraints on the driver pool [5] - December data from the Logistics Managers' Index revealed the largest contraction in transportation capacity in four years, alongside a significant drawdown in inventories [6] Group 3: Demand and Economic Factors - The supply-side setup is viewed as favorable into 2026, but broader risks such as tariff and geopolitical uncertainty, employment, and inflation still pose challenges [7] - Demand is considered the critical factor that typically ignites rising rates, margins, and earnings, as seen in the 2017/18 upcycle [7] Group 4: Company-Specific Developments - Susquehanna upgraded shares of J.B. Hunt Transport Services to "positive," citing improved rail service and motivated rail partners as factors that should provide volume tailwinds for intermodal operators [8]