AI Disruption Triggers Historic Sell-Off as Logistics Stocks Plunge on Freight Efficiency Fears

Trucking and logistics stocks drop on release of AI freight scaling tool

Tractor trailers sit parked at a J.B. Hunt Transport Services Inc. facility in Columbus, Ohio. Shares of several trucking and logistics companies declined Thursday on fears that new artificial intelligence tools could slash major freight inefficiencies, leading to less demand for the industry's services. A new tool from AI company Algorhythm Holdings has made trucking companies the latest victim of the market's AI jitters, adding to the historic sell-off in software stocks and real estate companies. The notable market rotation has come as investors are increasingly scrutinizing traditional businesses that may not be able to keep up with rapid advancements in AI. Leading trucking and logistics stocks C.H. Robinson and RXO dropped more than 20% each during Thursday's session. J.B. Hunt Transportation Services declined about 9%, while XPO lost nearly 7.9% and logistics company Expeditors International of Washington fell nearly 16.5%. There's an "emerging debate around open-source automation agents such as Molt Bot that offer increased potential to automate routine back-office tasks and help equalize the technology playing field for smaller operators," said Baird analyst Daniel Moore in a note. He reiterated his outperform ratings on C.H. Robinson and Expeditors, saying "automation is not a new theme." Shares of Algorhythm, a penny stock before Thursday, popped about 31%, meanwhile. Algorhythm announced earlier this week that its SemiCab's platform, deployed with live customers, is allowing operators to scale freight volumes by 300% to 400% without increasing their headcount. According to its press release, the SemiCab platform reduces "empty freight miles" by more than 70% across active customer networks. The company said that trucks are driving empty nearly one out of every three miles and therefore lose more than $1 trillion in freight spending each year, citing data from Mordor Intelligence. "What we're proving with SemiCab is that when freight is managed as a coordinated network rather than isolated transactions, utilization improves dramatically. The substantial reduction in empty miles that we are able to achieve for our customers represents a fundamental shift in how logistics economics work," said Ajesh Kapoor, CEO of SemiCab. Separately, investors are watching to see how trucking companies could also be impacted by U.S. Transportation Secretary Sean P. Duffy's Wednesday ruling to prohibit, according to the announcement, "unqualified foreign drivers" from obtaining licenses to drive commercial trucks and buses. Duffy said that government reforms will seek to address safety concerns by preventing "foreign drivers" who have not undergone consular and interagency screening from receiving a commercial driver's license. Consular screening typically applies to non-U.S. citizens.

C.H. Robinson stock tumbles amid freight sector AI disruption fears By Investing.com

Investing.com -- C.H. Robinson Worldwide (NASDAQ:CHRW) stock plunged 20% Thursday, leading a broad selloff across freight transportation companies as investors fled from businesses potentially vulnerable to artificial intelligence disruption. The dramatic decline extended to several major industry players, with RXO, Inc. (NYSE:RXO) dropping 18%, Landstar System (NASDAQ:LSTR) falling 10%, Expeditors International of Washington (NASDAQ:EXPD) sinking 13%, XPO, Inc. (NYSE:XPO) declining 4%, and J.B. Hunt Transport (NASDAQ:JBHT) sliding 5%. While no specific news triggered the selloff, market participants appear to be rotating out of high-fee, labor-intensive business models that could be threatened by AI advancements in the freight logistics sector. The move mirrors similar investor reactions recently seen in software, private credit, real estate services, wealth management, and insurance brokerage sectors. Ironically, C.H. Robinson had previously received positive market attention for its early AI adoption efforts and resulting efficiency gains. Now the company faces the same disruption concerns affecting its peers. The selloff coincided with recent announcements from AI technology companies targeting freight inefficiencies. Algorhythm Holdings (NASDAQ:RIME) published a whitepaper this week claiming its SemiCab platform reduces empty freight miles by over 70% across active customer networks. According to Mordor Intelligence, the global truckload transportation industry represents approximately $3 trillion annually, with trucks driving empty nearly one-third of the time. This inefficiency translates to over $1 trillion in wasted freight spending each year, creating a massive opportunity for AI-driven solutions to disrupt traditional logistics models.