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Covenant Logistics Stock Tumbles as Company Prioritizes Long-Term Stability Over Rate Spikes

Covenant Logistics shares dropped sharply Thursday after an earnings report failed to reflect strengthening freight market conditions in early 2026. CFO James Grant told analysts the carrier's structural transformation intentionally limits exposure to volatile rate surges. The company shifted from spot-market irregular routes toward dedicated services and warehousing with multiyear customer commitments. Grant noted this strategy proved resilient during the recent freight recession, when Covenant's margins outperformed peers. The carrier plans three execution priorities: converting expiring contracts to long-term agreements, moving uncommitted capacity into committed revenue, and allowing its Managed Freight 3PL division to stabilize as contract rates align with capacity costs. Grant signaled investors should expect "steady improvements, not a hockey stick" recovery. The stock closed down 26 points Thursday.