What economic uncertainty?...

By way of observation—and the inexorable news cycle—it is hard not to see that we are still living in extraordinary times when it comes to the troublesome news regarding the economy.

Since the Wall Street/financial crisis truly reared its ugly head in September 2008 (and prior to that, too, really), it is fair to say we have been walking on fiscal eggshells, worrying about jobs, keeping our homes, and making sure there is actually some money still in the 401(k). But amid all this noise, freight transportation and logistics service providers have largely been doing quite well despite the difficult economic climate that can be felt by us all.

If you don’t believe that, take a quick look at the earnings statements of some of the biggest names in the business, such as three of the companies that have already reported: J.B. Hunt, CSX, Union Pacific, and Werner to name a few.

Without offering up every single earnings tidbit on these companies, here are a few clipped from their respective earnings reports that will give you an idea of how they fared:
-Union Pacific’s operating ratio of 67.0 percent was an all-time quarterly best, 4.3 points better than the second quarter 2011 and 1.2 points better than the previous record set in the third quarter 2010, and its quarterly net income of $1 billion was up 24 percent annually;
-CSX recorded its tenth consecutive quarter of year-over-year earnings growth, with net earnings of $512 million, good for a 1.2 percent gain;
-J.B. Hunt recorded quarterly net earnings of $80.5 million for an 18 percent annual gain and operating revenue of $1.26 billion, which was up 8 percent; and
-Werner’s quarterly net income of $30.6 million represented an 11 percent annual gain, with revenue up 1 percent at $522 million.

To be sure, there are some things helping these numbers. One is fuel prices declining for most of the quarter and another being that, as Werner observed that “freight demand demonstrated typical seasonal trends and improved into June,” among others.

In more normal economic times, say before September 2008, it was safe to say that freight transportation was a very accurate barometer of economic activity. It stands to reason that this logic holds true today but maybe not to the same extent.

A recent Wall Street Journal column noted that large, healthy trucking firms that make up most of the sector’s market capitalization are thriving. But it added that indicators like the “Cass Freight Index show a significant slowdown in trucking activity recently and a worrying buildup of inventories at wholesalers, manufacturers and retailers.”

Now that last part sounds pretty familiar as does the concern or anxiety that Peak Season may yet again fail to materialize.

While the companies that are moving freight are largely doing well and have the financials to back it up, that does not mean that the general economy is feeling the same way. To be sure, these companies each have concerns collectively for the industries they cover as well as some pertaining to government regulations and customer-specific ones as well. But none of them are turning out the lights any time soon either.

It will be nice to hopefully see things turn around in the general economy to the point where they are matching up comparatively to the transport stocks of the largest companies moving freight and providing shippers with stellar service on a daily basis. There is a long way to go, but we will get there eventually.