RXO (RXO) Stifel Financial Corp. Transportation & Logistics Conference 2026 summary

Market cycle and supply-demand dynamics

• Regulatory changes, including non-domiciled CDL and English Language Proficiency, are reducing trucking supply, with estimates of a 20%-25% reduction in certain segments.

• Tender rejections have risen to low double digits, indicating tightening supply despite soft demand.

• Any improvement in demand could quickly tighten the market further, given the current fragile supply-demand balance.

• Weather events have temporarily increased tender rejections, but structural supply reductions are the main driver.

• Gross margins are compressed in the short term for buyers of transportation capacity.

Demand trends and end markets

• Industrial and manufacturing verticals showed improvement in Q4, partly due to special projects.

• ISM new orders component hit its highest level since 2022, signaling potential demand recovery.

• Automotive volumes, previously a headwind, are expected to stabilize and no longer drag on gross profit in 2026.

• Other verticals are tracking in line with overall truckload volume, which was down low double digits year-over-year.

• Automotive expedite business thrives during periods of disruption or production changes, offering higher profitability.

Strategic initiatives and acquisitions

• The Coyote acquisition focused on people, customers, and technology, with high retention and customer continuity.

• Technology integration post-acquisition is complete, with positive feedback and ongoing system enhancements.

• Initial profitability post-acquisition was below expectations, but volume stabilization and a strong pipeline have improved outlook.

• Future M&A will be considered if it adds scale or new services, but the bar for deals remains high.

• Volume declines post-acquisition were partly due to intentional pricing decisions; late-stage pipeline is up over 50% year-over-year.