On Tuesday, Swift Transportation announced that they’ll immediately freeze the growth of their fleet, and may even reduce its size, due to the company’s falling stock price.
Over the last year, the company’s stock price has been cut in half, and touched a one-year low of $14.26 just last week.
Swift’s CEO Jerry Moyes spoke about the company’s poor performance on Tuesday and made the announcement to halt fleet growth in order to increase profitability.
“We are extremely disappointed with the current stock price,” he said. “Effective immediately we will enter into a zero fleet growth mode. Until we reach a best in class utilization level, we will not be adding any new equipment.”
The company blamed falling profits on sagging freight demand, coupled with the over-expansion of their fleet size. The company also said they’re considering selling off some of their fleet.
Wall street analyst Jason Seidl commented on the company’s announcement. “In the past, Swift used to be a grow-grow-grow at any cost type of company. Investors soured on that when it wasn’t good for their profitability,” he said.
According to the Wall Street Journal, Swift expanded their fleet by 831 trucks in the 3rd quarter, bringing their total fleet size up to 13,469, almost a 5% increase from the year prior.
