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

                                  Nov 14, 2023 - Firms Cut Prices
                                  • Long distance general freight trucking firms decreased prices moderately during the first eight months of 2023 as demand decreased during the period. Industry employment decreased slightly during the period despite reports of ongoing driver shortages. Wages for nonsupervisory employees increased slightly.
                                  • Retail diesel prices decreased in late October despite ongoing conflict in the Middle East, ac-cording to FreightWaves. The average weekly retail diesel price decreased 9.1 cents during the seven-day period ending on October 30 to $4.454 per gallon, according to US Department of Energy/Energy Information Administration (DOE/EIA) data. The DOE/EIA price never did have the type of surge seen in the futures market because that sharp increase in the futures market proved to be short-lived and retail numbers at the pump operate on a lag, according to FreightWaves. The Hamas-driven upward move in the futures market is now mostly over in broader petroleum futures markets. Driving the downward trend, according to analysts, is that for all the fears of a broader Mideast war that could take out oil production, shipping capabili-ties, or both, none of those fears have been realized, FreightWaves reported.
                                  • US crude oil refining capacity has increased by more than 100,000 barrels to 18.1 million barrels per day (bpd), according to the US Energy Information Administration. The growth reversed two years of decreases during the first two years of the COVID-19 pandemic, when processing capacity to produce gasoline, diesel, and jet fuel fell 5.4% as lockdowns and work-from-home policies crushed demand. The total doesn't include a 250,000-bpd increase at Exxon Mobil's Beaumont, TX, refinery in March. The Beaumont expansion, the largest addition to a US refinery in more than a decade, pushed the total to about 18.3 million bpd, still shy of the 2019 peak. Diminished capacity resulted in sky-high fuel prices and record industry profits when gasoline and diesel demand rebounded last year.
                                  • The Inflation Reduction Act of 2022 includes the Qualified Commercial Clean Vehicle tax credit to accelerate adoption of electric medium-duty and heavy-duty trucks. A tax credit of up to $40,000 is available to help make owning an electric truck cheaper than owning a diesel one in most use cases. Urban and regional electric trucks are likely to be cost-superior to diesel ones as soon as 2023, according to some analysts.
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