Core Insights - The Zacks Transportation-Services industry is currently facing significant challenges due to low freight rates, high inflation, and ongoing supply-chain disruptions, compounded by tariff-related uncertainties and geopolitical issues [1][4][6]. Industry Overview - The Zacks Transportation-Services industry encompasses companies that provide transportation, logistics, leasing, and maintenance services, with a focus on global logistics management and third-party logistics solutions [3]. - The health of this industry is closely tied to the overall economy, with improvements in manufactured and retail goods, pricing, and global economic conditions benefiting industry participants [3]. Current Trends - **Freight Downturn**: The Cass Freight Shipments Index has declined by 9.3% year over year in August, indicating a persistent downturn in freight demand [4]. - **Cost Pressures**: The industry is experiencing rising cost pressures due to labor shortages and increased expenses for equipment and services, which are eroding profit margins [5]. - **Tariff Turmoil**: Protectionist tariff policies are reshaping the industry by increasing costs and disrupting supply chains, leading to uncertainties for investors [6]. - **Fed Rate Cuts**: The U.S. Federal Reserve's recent interest rate cut of 25 basis points may provide relief by lowering borrowing costs for transportation service providers [7]. Industry Performance - The Zacks Transportation-Services industry ranks 210 out of 243 Zacks industries, placing it in the bottom 14% and indicating dismal near-term prospects [8][9]. - The industry has underperformed compared to the S&P 500 and the broader Transportation sector, declining by 13.4% over the past year, while the S&P 500 has appreciated by 18.3% [11]. Valuation Metrics - The industry is currently trading at a forward price-to-sales ratio of 1.3X, significantly lower than the S&P 500's 5.42X and the sector's 1.51X [14]. Notable Companies - **Expeditors International of Washington (EXPD)**: Currently holds a Zacks Rank 3 (Hold) and has consistently beaten earnings estimates, although it faces challenges from weak volumes and declining rates [18]. - **C.H. Robinson Worldwide (CHRW)**: Also holds a Zacks Rank 3, with strong cost control measures and a positive liquidity position, having surpassed earnings estimates consistently [22]. - **Matson (MATX)**: Headquartered in Honolulu, MATX carries a Zacks Rank 3 and has implemented effective cost-management actions, achieving earnings beats in three of the last four quarters [25].