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HomeMarketConsumer Weakness Could Turn Into a Second-Half Tailwind, Trucking Firm Says

Consumer Weakness Could Turn Into a Second-Half Tailwind, Trucking Firm Says

Truck-brokerage firm RXO reported strong fourth-quarter earnings.

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There is a lot of concern about recession floating about markets, and a weakening consumer is a big reason why.

Things in 2023 might eventually turn out better than feared, though. Just look at what logistics provider
(ticker: RXO) sees for the back half of this year.

Thursday evening, truck-brokerage firm RXO reported fourth-quarter earnings per share of 28 cents on sales of $1.1 billion. Wall Street had expected earnings of 23 cents a share on sales of $1.2 billion. The top line doesn’t matter quite as much for brokerages, which earn a spread between what they charge customers and what they pay for logistics capacity.

Volume growth is a key metric for brokers and fourth-quarter volumes grew 4% for RXO. The company is expecting growth again in the first quarter of 2023. That’s a positive for the economy, but a lot of company-specific outperformance is embedded in that number.

Truck-brokerage peer
C.H. Robinson Worldwide
(CHRW) reported a 5.5% year-over-year decline in transaction volumes in the fourth quarter of 2022.

“We still see continued weakness within retail and e-commerce,” says Jared Weisfeld, RXO chief strategy officer. He characterized 2022 as a year of inventory destocking, which means less demand for new items to put on shelves. “We are cautiously optimistic that turns to a tailwind in the second half of [2023].”

Outside of retail, Weisfeld sees solid performance in other segments of the economy such as manufacturing.

A second-half recovery would be welcomed by logistics providers who are seeing lower freight rates. It would also be welcomed by investors. Logistics is the lifeblood of an economy, shipping consumers, and businesses things they need.

RXO stock isn’t trading much shortly after results were released. Shares finished Tuesday up 1% at $20.30 a share. The
S&P 500
Dow Jones Industrial Average
rose 1.2% and 0.9%, respectively.

This is the first quarter RXO has reported as an independent entity. The company was spun off from
(XPO) on Nov. 1. Since the spin, RXO stock has gained about 6%.

Management will host a conference call Wednesday morning at 8 a.m. eastern time. Investors and analysts will want to hear more about the economy and the year ahead.

Write to Al Root at


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