Local General Freight Trucking

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 35,000 local general freight trucking companies in the US provide truckload (TL) and less than truckload (LTL) transportation services within cities and over short distances with drivers returning home each night. Trucking firms transport a wide variety of goods, but the majority is boxed or palletized. Local routes are typically less than 150 miles.

Failure to Meet Safety Requirements

Failure to meet safety regulations can result in investigations, fines, loss of license, and idled vehicles.

Emergence of Online Freight Coordinators

The local freight trucking industry is benefiting from online sites, like Uber Freight and TruckLoads, that match shippers and distribution centers with local freight carriers.

Industry size & Structure

A typical local general freight trucking company operates out of a single location, employs fewer than 5 workers, and generates about $1.5 million annually.

    • The local general freight trucking industry consists of about 35,000 companies, which employ about 301,000 workers and generate about $51 billion annually.
    • The industry is fragmented with the 50 largest firms representing just 10% of revenue.
    • Firms range from the small operations that serves a single local area using few owned trucks, to large firms that operate a network of locations across the nation using leased vehicles and servicing many local markets.
    • About two dozen large firms have networks of 10 or more establishments, which are regionally or nationally dispersed to serve specific cities.
    • Large companies include Jack Hood Transportation, Holland, Reddaway, New Penn, Cowan and EPES.
                                    Industry Forecast
                                    Local General Freight Trucking Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Feb 16, 2024 - Firms Increase Prices
                                    • Local general freight trucking firms increased prices slightly during the second half of 2023 after decreasing them substantially during the first half of the year, according to the US Bureau of Labor Statistics. Industry employment and wages for nonsupervisory employees increased moderately during 2023 as driver shortages persisted despite decreasing demand for trucking. Truck tonnage decreased slightly during the first nine months of 2023, according to the US Bureau of Transportation Statistics.
                                    • Many trucking companies are struggling with increasing insurance rates due in large part to the rise in so called "nuclear verdicts", or exceptionally high jury awards that surpass what should be a reasonable or rational amount, according to FreightWaves. It is important for firms to take a proactive approach to insurance renewals as fleets continue to navigate in the current cash-strapped environment, FreightWaves analysts noted. Each insurance provider assigns different weights to various trucking company characteristics. Some insurers emphasize driver retention when quoting rates, for example, while others do not mind high turnover. While several factors contribute to a carrier’s insurance rates, variables that hold more weight than others include individual loss history; number of years in business; and Compliance, Safety, and Accountability scores.
                                    • Gridlock in the US Congress may prevent the passage of meaningful truck-related legislation in 2024, according to FreightWaves. “We’re likely to see an already slow and increasingly paralyzed Congress slow further as both parties try to prevent the other from notching significant wins,” P. Sean Garney, co-director at Scopelitis Transportation Consulting, which specializes in trucking regulations and legislation, told FreightWaves. “Outside of a few must-pass pieces of legislation, I don’t expect much to get done unless an unexpected crisis emerges. Randy Mullett, a transportation consultant and principal of Mullett Strategies, says that regulation rather than legislation will be the driving force behind trucking policy. “... the regulatory agencies are going to be smelling blood in the water, because we may have a change in administration, and if so, they’ll need to get any regulations out sooner rather than later,” Mullett said, to give final rules time to take effect before a new administration can attempt to repeal them. Proposed rules to tighten standards for independent contractors and on carbon emissions from heavy trucks may be among the few initiatives that advance.
                                    • The Biden administration is proposing new climate regulations for heavy-duty vehicles including delivery trucks and school buses. The proposals would cut 10 billion tons of carbon dioxide emissions through 2055, according to the Environmental Protection Agency (EPA). The avoided emissions would be equivalent to more than twice the 2022 US total carbon dioxide emissions. The EPA is also proposing to target other pollutants coming from these vehicles that form soot and smog and can be harmful to peoples’ health. EPA Administrator Michael Regan described the proposed regulations as the “strongest ever” federal pollution standards.
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