PS Logistics has kept its debt ratings steady, showing stability in a freight market that is growing slowly. Moody’s, which has been cautious about freight companies recently, reaffirmed the company’s B2 corporate family rating, keeping it below investment grade but stable.
The company, which operates under Carriage Logistics, also retained its B1 rating for senior secured first-lien loans and a Caa1 rating for unsecured notes. Moody’s pointed to PS Logistics’ size, steady operations, and good liquidity as strengths but noted its high debt, frequent acquisitions, and ongoing investment needs as challenges.
Growing Through Acquisitions
PS Logistics has expanded quickly by buying other companies, helping it secure a strong position in flatbed trucking. In 2024 alone, it acquired Fluker Transportation, Yardy Transportation, and the flatbed unit of ELS, adding to the 27 truckings and five logistics companies it has purchased since 2016. This growth has strengthened its business but has also added to its financial commitments.
Despite Moody’s cautious outlook on the freight industry, PS Logistics’ rating remains stable, supported by its young fleet, strong market presence, and expected profit growth. The company runs 4,500 trucks and over 40 terminals across the U.S., giving it a solid foundation. Moody’s expects profits to improve in 2025, as trucking rates rise slightly and excess capacity in the market decreases.
Financial Position and Risks
The company generated $1.6 billion in revenue over the past year. While Moody’s did not disclose profit figures, it expects debt levels to improve, bringing the company’s debt-to-earnings ratio to 5X by the end of 2025. A higher rating could come if profits exceed 6% and debt levels drop below 4X, while a downgrade may happen if debt remains high and profits fall below 4%.
PS Logistics also has a $150 million credit facility, which remains unused and is set to expire in September 2026. Moody’s will keep an eye on the company’s fleet age, as failing to invest in new trucks could lead to higher maintenance costs or signal financial difficulties.
Competitive Edge
One of PS Logistics’ key strengths is its driver pay system, which is based on freight rates rather than miles driven. This flexible model helps control costs and has contributed to lower driver turnover, a major advantage in an industry struggling with labor shortages.
Lading Logistics uses this knowledge to make informed decisions, manage risks, and strengthen its position in the freight industry.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. The views expressed do not represent PS Logistics, Moody’s, or any other entity mentioned.
Sources for the article: Yahoo Finance, Freight Waves, Indexbox
