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 40,000 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 7-8 workers, and generates about $1.4 million annually.

    • The local general freight trucking industry consists of about 40,000 companies, which employ about 299,000 workers and generate about $59 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

                                    Jun 15, 2024 - Heavy Duty Truck Sales Increase
                                    • Heavy duty truck sales have rebounded from a 2020 pandemic-driven trough to pre-pandemic levels, according to the US Bureau of Transportation Statistics. Local general freight trucking firms increased prices slightly during the first four months of 2024, according to the US Bureau of Labor Statistics. Local general freight trucking industry sales are forecast to grow at a 3.56% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                    • US diesel demand hit a 26-year seasonal low in March, according to the US Energy Information Administration. Product supplied of distillate — the fuel that powers trucking, heating, and heavy industry — plunged to 3.67 million barrels a day during March. “It’s a function of the slowing of the economies in Asia and the US and how inflation is tightening consumer spending habits,” according to Dennis Kissler, senior vice president for trading at BOK Financial Securities.
                                    • Several factors suggest potential rate increases in the Full Truck Load (FTL) market during 2024, according to FreightWaves. Increases may occur due to decreased capacity and increased demand linked to projections for economic growth and continued e-commerce boom which could lead to higher freight volumes. This will further intensify demand for limited capacity. Other elements influencing FTL rates are rising costs associated with higher diesel fuel prices, labor costs, and insurance premiums. Many FTL contracts negotiated during the downturn in 2023 are up for renewal in 2024. New contracts are likely to reflect the changing market conditions and higher cost environment. LTL rates are expected to remain relatively stable in 2024, with potential for modest increases – or even slight – decreases depending on specific segments and market conditions.
                                    • 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.
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