- Freight AI Claims Sparked Sharp Market Selloff in Trucking Logistics Stocks
- Investors Reacted Strongly to Automation Fears as Small AI Company's Value Soared
- Market anxiety around AI disruption extended beyond trucking to healthcare and publishing.
Shares of transportation and logistics companies plunged after investors reacted sharply to a small artificial intelligence company's claims about automation in transportation operations.
Wall Street Journal reported that the liquidation “is one of the most extreme examples yet of the sell now and ask later spirit sweeping financial markets in the age of artificial intelligence.”
The selloff began after Algorhythm Holdings, once known for its in-car karaoke products, said its SemiCab platform was helping customers scale cargo volumes by 300% to 400% without adding staff.
Restricted by human bandwidth
The company claims that operators using SemiCab have been able to “handle over 2,000 loads per year, compared to the traditional industry benchmark of approximately 500 loads per year per freight forwarder, demonstrating a 4x improvement in workforce productivity.”
“Historically, logistics has been limited by human bandwidth,” said Gary Atkinson, CEO of Algorhythm. “Every increase in volume requires more planners, more dispatchers and more manual intervention. Our SemiCab platform breaks that dependency by building intelligence directly into the freight operating system.”
That statement sent Algorhythm shares up nearly 30%, despite the company's small market value of $6 million, but the reaction elsewhere was much less optimistic.
The Russell 3000 Trucking Index fell 6.6% as traders rushed out of logistics names. CH Robinson Worldwide fell 15% at the close after falling as much as 24% earlier in the session.
Landstar System fell 16%, while RXO fell 20.5%. JB Hunt Transportation Services and XPO each lost about 5%. The selling pressure extended beyond trucking, with drug distribution companies including McKesson Corp and Cardinal Health falling about 4%. European logistics groups were also affected. DHL Group fell 4.9%, DSV A/S fell 11% and Kuehne+Nagel International AG lost 13% in late trading.
Algorhythm's CEO seemed surprised by the magnitude of the market reaction. “Never in my wildest dreams would I have imagined a day like today,” Atkinson said. “It's almost like David versus Goliath.”
Algorhythm previously focused on karaoke technology before selling its Singing Machine unit to Stingray for $4.5 million and pivoting into AI transportation software.
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