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

                                  May 4, 2023 - Diesel Price Decrease Continues
                                  • US diesel prices have decreased to levels not seen since the start of the Russian invasion of Ukraine. The weekly benchmark Department of Energy/Energy Information Administration average retail diesel price was $3.656 per gallon on April 24. The price has declined in 21 of the past 26 weeks as of April 24 and is down $1.264 per gallon since October 24, 2022. It’s also the lowest price since a benchmark posting of $4.104 a gallon on February 28, 2022. Prices reached their highest point during the summer of 2022, peaking around $5.50 per gallon. Experts say that the drop can be attributed to a number of factors, such as higher interest rates, warmer temperatures lowering the need for heating oil, and an overall decline in demand.
                                  • Decreasing retail diesel prices have been driven by pump prices catching up with earlier declines in futures and wholesale diesel prices, according to trucking industry news site Freightwaves. Some analysts see price increases ahead, however. Goldman Sachs’ head of commodity research Jeffrey Currie expects higher prices by the end of 2023. “Our conviction in the bull case has never been stronger,” Currie said. He cited a lack of significant spare capacity in markets and low inventories for most crude and products, with the result that “you have no buffer to deal with the rebound in demand that is likely to come out of China. As China starts powering ahead, that is going to tighten up the bull market.” He also cited what he forecast as “strong” economic activity in Europe.
                                  • Kodiak Robotics announced that its self-driving 18-wheelers are hauling products from IKEA, the Swedish home furnishings retailer. Deliveries have been made seven days per week from the IKEA Distribution Center in Baytown, TX, to an IKEA store in Frisco, outside of Dallas, according to a news release from Kodiak, Human truck drivers pick up loaded trailers and then sit behind the wheel to oversee the autonomous delivery.
                                  • 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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