Trucking Companies

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 119,400 trucking companies in the US provide transportation services for a wide variety of goods. The majority of truck loads are full Truck Loads (TL), meaning a single customer fills the entire trailer. About 15% of loads are Less Than Full Truck Loads (LTL), where freight from multiple customers is consolidated into one trailer.

High Failure Rate

Small trucking start-ups have a high failure rate, with an estimated 85% failing before their second year of operation, according to the National Association of Small Trucking Companies.

Limited Driver Hours

The federal Hours of Service (HOS) rules dictate how long a driver can be on duty and behind the wheel.

Industry size & Structure

A typical trucking company operates out of a single location, employs 12 workers and generates about $2-3 million annually.

    • The trucking industry consists of 119,400 companies, employs 1.4 million workers and generates over $324 billion in annual revenue.
    • 88% of trucking companies operate out of a single location.
    • One in 4 drivers is an independent owner-operator who owns their truck and contracts out services to trucking companies.
    • About 80% of trucking establishments employ fewer than 10 workers.
    • Large companies include UPS, FedEx, DHL, YRC Worldwide, Ryder, XPO Logistics (Con-way), Penske Truck Leasing, and JB Hunt Transport Services.
                                Industry Forecast
                                Trucking Companies Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                May 4, 2022 - Costs Rising Significantly During Pandemic
                                • Trucking company operating expenses are much higher than before the coronavirus pandemic, according to FreightWaves. The benchmarking, analytics, and forecasting firm estimates that operating expenses for nearly all carriers have surged by as much as $0.38 per mile over pre-COVID levels. This calculation only includes maintenance, insurance, and fuel costs. Inclusion of driver wages or equipment purchase/finance could nearly double the increased amount of operating expenses. If a trucking fleet were to start up today with an employee driver, its operating cash expenses would be as much as $0.72 per mile higher than a trucking fleet that was started in 2019.
                                • President Biden announced a plan in late 2021 to recruit more truck drivers, but many trucking industry experts say that driver turnover and retainment are as important as recruiting new drivers. The trucking industry provides no flexibility to drivers, experts and veteran drivers say. Truckers spend, on average, 250 nights away from their family. Many are suffering from diabetes. They have a higher divorce rate than employees in any other industry, and there is no opportunity for advancement. More is needed, industry experts and veterans say, than a program to create new drivers. Structural changes that improve working conditions are needed to encourage experienced drivers to remain in the industry.
                                • Some trucking industry stakeholders say that the shortage of truck drivers would intensify if trucking firms require drivers to be vaccinated against COVID-19. The driver turnover rate was 91% in 2019, according to The New York Times. Plenty of people have the commercial driver’s licenses needed to operate trucks, said Michael Belzer, a Wayne State University economist who has studied the industry for 30 years. “None of them will work for these wages,” he added. Studies even show that their pay, when adjusted for inflation, has declined markedly since the 1970s.
                                • FTR Transportation Intelligence expects slower growth of freight volumes in 2022 and easing trucking capacity utilization. Freight rate growth in 2022 is expected to moderate but remain at elevated levels. Headwinds for 2022 include reduced consumer spending due to inflation, the dwindling effect of pandemic-related stimulus, and continued driver shortages.
                                • Transportation capacity, including trucking, is tight, according to the Logistics Manager’s Index (LMI) report released in February. The LMI was 75.2 in February, 3.3 points higher than January and the second-highest level recorded in the dataset’s five-year history. This was the 13th consecutive month that the index stood above 70, a level noted as “significant expansion.” A reading above 50 indicates logistics expansion, while a reading below 50 suggests a contraction.
                                • US trucking firms are increasing pay to attract drivers as the US economy gains steam and demand for freight keeps rising, according to FreightWaves. While the wage increases have helped maintain fleet sizes, the lack of drivers has stifled fleets’ ability to grow organically. The US infrastructure law signed by President Biden in mid-November 2021 includes a pilot program that would allow 18-20- year-olds to drive tractor-trailers across state lines. According to the American Trucking Association, the trucking industry is about 80,000 drivers short – up nearly 20,000 compared to before the pandemic began. The National Transportation Institute estimates that, on average, carriers increased driver wages by 8% in 2021.
                                • Trucking firms may be under increasing pressure from customers to require their employees to be vaccinated. Tyson Foods requires all of its US workers to get vaccinated, including 1,300 drivers for its private delivery fleet. Industry watchers suggest more shippers, especially of food-grade freight, may begin pressuring trucking companies to have vaccinated drivers. More than one-third of US employers plan to move forward with their vaccine mandates despite the Supreme Court decision to overturn the Biden Administration’s vaccine-or-test mandate for firms with 100 or more employees, according to a January survey by Gartner.
                                • The US Federal Motor Carrier Safety Administration (FMCSA) has extended several COVID-19 emergency waivers and declarations to provide regulatory relief to trucking firms and their drivers during the pandemic. The waivers and declarations originally put in place early in the pandemic and last extended in August 2021 offer leeway on service hours, license renewal, and medical examination requirements. The waivers and declarations only apply to truck drivers hauling freight related to pandemic relief, including vaccines and other COVID-19 prevention medical supplies, sanitation and PPE supplies, emergency-related building supplies, groceries, paper goods, fuel, and livestock and feed. The latest extension of the waivers and declarations is set to remain at least through the end of May 2022.
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