- Freight AI claims sparked sharp market sell-off in trucking logistics stocks
- Investors reacted sharply to automation fears as small AI company’s value jumped
- Market anxiety over AI disruption extends beyond trucking to healthcare and publishing
Shares of trucking and logistics companies plunged after investors reacted sharply to a small AI company’s claims about automating freight operations.
Wall Street Journal reported that the liquidation “is one of the most extreme examples yet of the sell-now, ask-later philosophy sweeping financial markets in the age of artificial intelligence.”
The sale began after Algorhythm Holdings, once known for its in-car karaoke products, said its SemiCab platform helped its customers increase freight volumes by 300 to 400 percent without adding staff.
Limited by human bandwidth
The company claims that operators using SemiCab have been “able to handle more than 2,000 loads per year, compared to the traditional industry benchmark of approximately 500 loads per year per freight broker, demonstrating a 4x improvement in labor productivity.”
“Historically, logistics has been limited by human bandwidth,” said Gary Atkinson, CEO of Algorhythm. “Each increase in volume requires more schedulers, more dispatchers, and more manual intervention. Our SemiCab platform breaks this dependency by integrating intelligence directly into the freight operating system.”
The statement sent Algorhythm shares up nearly 30%, despite the company’s low market value, to $6 million, but the reaction elsewhere was far 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 24% earlier in the session.
Landstar System slipped 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 have also been affected. The DHL group fell 4.9%, DSV A/S fell 11% and Kuehne+Nagel International AG lost 13% at the end of the session.
Algorhythm’s chief executive seemed surprised by the scale 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 moving into AI freight software.
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