Trucking Shortage will impact upstream activity in 2022

[dan_s]

I am posting this note from Stifel because I believe the shortage of trucks and drivers will have an impact on some upstream companies.

Trucking, Logistics & Truck Leasing - 2022 - Year of the Tiger and the Trucker?
We Highlight Why Supply vs. Demand Should Remain Favorable Next Year - Bert W. Subin
When we initiated coverage of Trucking earlier this year, the focus was squarely on the supply dynamics. We believe those dynamics (lagging driver growth + limited truck supply) built a convincing case for rate increases and resembled mid-cycle more than late-cycle. Today, we continue to see supply as constrained and don't foresee that changing near-term. What could change, however, is the demand side of the equation. In this note, we highlight the key supply and demand variables that should frame the upside/downside for rates in 2022 and the catalysts to watch. We favor multi-modal providers Knight-Swift (KNX, $61.26, Buy) and Schneider (SNDR, $26.18, Buy) given their better ability to capture demand and continue to see upside for Werner (WERN, $47.10, Buy) and Heartland Express (HTLD, $16.98, Buy) given positive recruitment trends and historically favorable valuations.

[CreativeEquity]

Will this have a larger impact on frackers vs conventional well operators? My assumption is they are more capital intense.

[dan_s]

It will have more impact on the frackers because they need a lot of trucks to haul in tubulars and sand for well completions.

[CreativeEquity]

Thank you !