Opportunities for transportation providers will be progressively more concentrated in consumer staples and e-commerce as movement restrictions and business shutdowns restrict retail spending and industrial production (though we note the manufacturing PMI number was barely in contractionary territory and beat expectations).
Now that produce harvesting has begun in central Florida, we expect refrigerated capacity to continue tightening. Even after the initial wave of panic-buying and grocery stock-building subsides, we believe that retail grocery volumes will settle at a rate 2-3x normal levels due to school and restaurant closures.
Transportation companies with concentrated exposure in unfavorable verticals (oilfield services, automotive, live shows and events) will continue to be stress-tested and reduce headcount.
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