Wunderlich's 2015 Transportation Outlook: 'Tight Capacity To Spur Rebound' For Laggards

Nicholas Bender of Wunderlich Securities published on Monday a note detailing the outlook for the transportation sector in 2015.

Throughout 2014, domestic truck carriers benefited from a “dramatic” tightening of capacity, a trend that Bender notes is unlikely to change in the near term. However, the analyst adds that with tighter capacity, costs will rise which creates a “significantly less” margin for error in 2015.

Bender notes that intermodal operators should have benefited from these trends in 2014, but unreliable rail service weight on operations. The analyst goes on to state that the situation should improve in 2015 and maintains an optimistic view that intermodal operations will outperform.

Finally, Bender states that the biggest underperformers throughout 2014 came from the dry bulk sector. The analyst believes that industry fundamentals are still challenged heading in to the new year and that valuations “adequately” reflect the segment's oversupplied condition.

Bender's “best idea” for 2015 remains Saia Inc SAIA, an LTL operator that improved its service offering and operational profile in recent years. The analyst believes the company will see above-market tonnage growth in 2015.