US Transportation and Warehousing Sector

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 317,854 transportation and warehousing establishments in the US provide the transport of commodities, goods, cargo, and passengers by land, sea, or air as well as temporary and long-term storage for goods.

Variable Fuel Costs

In the transportation sector, fuel is a major expense, and the cost of fuel can vary significantly based on global market conditions.

Supply Chain Interdependence

Because the transportation and warehouse sectors are integral parts of the supply chain, the sectors are dependent on the effectiveness of the other links, which include suppliers, manufacturers, wholesalers, importers, exporters, e-commerce, and distributors that may be located anywhere in the world.

Industry size & Structure

The transportation and warehousing sector is comprised of 317,854 establishments that employ 6.6 million workers and generate $1.4 trillion in annual revenue, according to government sources.

    • The transportation and warehousing sector represents 2.7% of the nation's Gross Domestic Product (GDP) and employs 4% of the country's workers.
    • The sector is concentrated at the top with the 20 largest firms representing 34% of revenue, but it is fragmented at the bottom.
    • In addition to employer establishments, the transportation and warehousing sector has 2.5 million owner-operated establishments with no employees. Subsectors with the highest numbers of nonemployer establishments are transit and ground passenger transportation (52%); truck transportation (27%); couriers and messengers (14%); and support activities for transportation (6%). The owners of nonemployer establishments typically perform the work and may outsource support functions like marketing and accounting.
    • The transportation and warehousing sector shed about 27,000 establishments in 2021, which equals about 8.5% of existing establishments, according to the Bureau of Labor Statistics. However, the sector added about 43,000 new establishments, which is equivalent to 13.6% of existing establishments. As a result, the sector had a growth rate of 5%.
    • The transportation and warehousing sector is forecast to grow its employment base by 8.4% overall in 2021-2031, which is higher than the national average of 5.3% for all jobs, according to the Bureau of Labor Statistics.
                                    Industry Forecast
                                    US Transportation and Warehousing Sector Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    May 5, 2024 - Industry Labor Costs Increase
                                    • Transportation and warehousing sector employment increased slightly during 2023 while wages for nonsupervisory employees increased moderately, according to the US Bureau of Labor Statistics. The volume of freight and passenger transportation provided by the for-hire transportation sector decreased slightly during the first half of 2023, according to the US Bureau of Transportation Statistics.
                                    • Global goods trade is expected to increase gradually in 2024 following a contraction in 2023 that was driven by the lingering effects of high energy prices and inflation, according to the World Trade Organization. The volume of world merchandise trade, a driver of demand for transportation and warehousing, is expected to increase 2.6% in 2024 and 3.3% in 2025 after falling 1.2% in 2023. Regional conflicts, geopolitical tensions, and economic policy uncertainty pose substantial downside risks to the forecast, however.
                                    • The US Environmental Protection Agency (EPA) has announced new emissions standards for heavy-duty trucks, buses, and other large vehicles. The rules will apply to eight classes of heavy trucks, from delivery vehicles and garbage trucks to long-haul rigs, and will cover model years 2027 through 2032. Required emissions reductions will gradually increase each year. Transportation accounts for 27% of the country's total greenhouse gas emissions, the agency said, and within the transportation sector, heavy-duty vehicles are the second-largest contributor, making up about a quarter of transportation emissions. The EPA estimated that the standards will avoid 1 billion tons of greenhouse gas emissions over the next three decades and provide $13 billion in net benefits in the form of fewer hospital visits, lost work days and deaths.
                                    • Attacks on cargo ships in the Red Sea and drought afflicting the Panama Canal have created a “perfect storm” of disruption in global shipping, according to Mike Giambrone, an account executive at logistics provider OEC Group. The Red Sea is a critical shipping lane for cargo traveling through the Suez Canal, which accounts for about 12% of global trade, according to Giambrone. Approximately 30% of global container traffic traverses the Suez Canal, transporting $1 trillion of goods per annum, according to the Government of New Zealand. Drought conditions in the Panama Canal, worsened by a severe El Nino, have severely impacted container ship traffic through that key trade route. The Panama Canal accounts for about 7% of global seaborne trade, according to the Wall Street Journal. “It’s really the East Coast and Gulf Coast markets that are going to see the results of this,” Giambrone said. He noted that when there’s a problem on the East Coast, shippers can transfer their capacity to the West Coast, but this can bring additional problems. Giambrone cited the post-COVID shipping surge that resulted in “a parking lot of container ships” at West Coast ports in 2021. Some ships were diverted to the East Coast to ease the congestion. “Then the East Coast started having serious congestion.”
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