Long Distance 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 47,600 long distance general freight trucking companies in the US provide truckload (TL) and less-than-truckload (LTL) transportation services between cities and across the country. TL trucks carry a load for a single customer, transporting the load directly to its destination. LTL trucks carry goods for more than one customer and make multiple stops to drop-off and pick-up freight. These trucking firms transport a wide variety of goods and may also provide services such as warehousing, packaging, and customs brokering for international transport. Long distance trips typically exceed 250 miles.

Volatility of Fuel Costs

Fuel consumption is a major expense for trucking companies, with nine miles to the gallon of diesel considered a good MPG range.

Rising Need for Drivers

Because of truck drivers’ difficult lifestyle and time spent away from home, many companies have trouble finding and retaining qualified long-haul drivers.

Industry size & Structure

A typical long distance general freight trucking company operates out of a single location, employs fewer than 20 workers, and generates about $5-6 million annually.

    • The long distance general freight trucking industry consists of about 47,600 companies, which employ about 823,500 workers and generate about $257.6 billion annually.
    • The truckload (TL) segment of the industry accounts for 88% of firms and 71% of industry revenue. The less than truckload (LTL) segment accounts for 12% of firms and 29% of industry revenue.
    • The TL segment is fragmented with the 20 largest firms representing 30% of the segment’s revenue. The LTL segment is concentrated with the 20 largest firms representing 77% of the segment’s revenue.
    • Large companies include Schneider, Old Dominion, YRC Freight, Swift Transportation, JB Hunt, and Werner Enterprises.
                                  Industry Forecast
                                  Long Distance General Freight Trucking Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 19, 2024 - Firms Decrease Prices
                                  • Long distance general freight trucking firms decreased prices moderately during 2023, according to the US Bureau of Labor Statistics (BLS). Industry employment decreased slightly during the period despite reports of ongoing driver shortages, while wages for nonsupervisory employees increased slightly, according to the BLS. Truck tonnage decreased slightly during the first nine months of 2023, according to the US Bureau of Transportation Statistics.
                                  • Carriers are contending with too much capacity and not enough demand during contract negotiation season, according to TD Cowen analyst Jason Seidl. Prices can’t come down much more because carriers are still facing higher operational costs, Seidl added. Some companies are expressing optimism for a turnaround in the back half of the year, but Seidl said that he hasn’t seen much data to support that other than what their customers are telling them.
                                  • The US Bank Freight Payment Index registered a 10.9% year-over-year decrease in shipment volume by truck in Q4 2023, with two regions showing a decrease of more than 14%. Traffic sank in all regions, from a relatively moderate 2.9% decrease in the west to a 14.5% decrease in the south-east and an 18.2% decrease in the south-west. Shipments have decreased for the past six quarters. Freight spending decreased 13.5% year over year in 2023, reflecting flagging demand and falling rates. “The truck freight market is feeling the impact of companies reducing inventories significantly, as well as consumers continuing to spend more on experiences over goods,” said Bob Costello, SVP and chief economist of the American Trucking Associations.
                                  • 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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