Trucking
Description
Companies in this industry provide long-distance and local freight trucking, including truckload (TL) and less-than-truckload (LTL) services. Major companies include US-based JB Hunt, Knight-Swift Transportation, Schneider National, and XPO Logistics, as well as Eddie Stobart Logistics (UK), Logisteed and Seino Super Express (both based in Japan), and TFI International (Canada).
Nations such as China, Germany, the US, the UAE, and Singapore, according to FNC Americas.
The US general freight trucking industry includes about 80,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $190 billion.
The industry is comprised of carriers that transport commodities for shippers using a commercial motor vehicle (CMV). This profile covers general freight companies, including for-hire carriers and independent owner-operators, which transport a wide variety of commodities using containers or van trailers. Companies primarily engaged in flatbed, tanker, or refrigerated trailer transport are covered in the Specialty Trucking industry profile. Express delivery services and moving and storage companies are covered in separate profiles.
COMPETITIVE LANDSCAPE
The rapid growth of online shopping and quick delivery options is expected to change patterns of demand for trucking services. As the number of brick-and-mortar retail locations declines, so will demand for long-haul dry van trucking. However, online purchases will increase the need for less-than-truckload hauls, medium-duty commercial vehicles, short-haul, and last-mile transportation.
Demand for trucking is driven by consumer spending and manufacturing output. The profitability of individual companies depends on efficient operations. Large companies have advantages in account relationships, bulk fuel purchasing, fleet size, and access to drivers. Small operations can compete effectively by providing quick turnaround, serving a local market, or transporting unusually sized goods. The US industry is fragmented: the 50 largest companies account for 40% of revenue.
In addition to domestic consumption and production, US truck transportation depends heavily on free trade through the North American Free Trade Agreement (NAFTA). The top gateway for truck transport between the US and Canada is Detroit; the top gateway for US-Mexico truck transport is Laredo, Texas. Cross-border congestion is a problem for trucking companies specializing in NAFTA-related trade. Movement to or from Canada and Mexico can often be hampered by long lines and lengthy inspection processes.
Trucking competes with other forms of cargo transportation, including rail, air, and water. However, the shift toward intermodal transportation means that these modes of delivery are often more complementary than competitive.
Competitive Advantages:
Connected Trucks — Connectivity-enabled telematics that streamline trucking fleet efficiencies can trim operating costs and make companies more competitive. Intelligent data management is vital in helping fleets meet ongoing demand.
Fleet Flexibility — As more consumers shop online, fewer long-haul trucks will be needed to stock retail stores. Demand is forecast to shift toward less-than-truckload hauls, short-haul, and last-mile transportation. To remain competitive, trucking companies may seek to combine the right balance of service offerings with fleets that include more medium-duty vehicles.
Focus on Safety — By adopting advanced truck safety features early, trucking companies can reduce costs associated with accidents. Advanced driver-assistance systems — including collision mitigation and lane-departure warnings — can reduce the potential for human error, which is the cause of 90% of truck accidents, according to Boston Consulting Group.
Companies to Watch:
Knight-Swift Transportation — Formed by the 2017 combination of truckload carriers Knight Transportation and Swift Transportation, the company operates throughout North America. It also offers freight brokerage and intermodal services. Both the Knight and Swift brands are being maintained.
Schneider National — Through its Schneider National Carriers unit, the company provides truckload service throughout North America. The company also offers transborder freight, intermodal service, warehousing, and brokerage services, while subsidiary Schneider Logistics offers supply chain management services.
XPO Logistics — The company specializes in third party logistics (3PL) but added less-than-truckload carrier service with the purchase of Con-Way in 2015. XPO offers domestic and international freight forwarding services as well as truckload freight brokerage service to more than 50,000 customers across the US, Canada, Mexico, Asia, and Europe.
PRODUCTS, OPERATIONS & TECHNOLOGY
General trucking services include long-distance and local trucking. These classifications can be subdivided into truckload (TL) and less-than-truckload (LTL) services. Transportation of boxed, palletized, and other packaged goods by road account for about 60% of industry revenue. Transportation of other goods by road account for 10% followed by transportation of climate-controlled boxed and palletized goods and dry bulks transportation at more than 5%.
TL shipments have trailers dedicated to a single shipper's cargo. A trucking customer typically loads a trailer full (or nearly full); the trucker then transports the container, and a receiver unloads the contents. Shipments are usually delivered within one or two days, depending on the distance.
LTL shipments are a smaller but growing part of the market. LTL carriers transport the consolidated cargo of several shippers on one truck, dropping goods off at multiple delivery points. Long-distance LTL truckers typically operate a network of terminals connected by long-distance routes. Because most shipments involve transfers at terminals, delivery times for LTL shipments are generally longer than for TL shipments. To lower delivery costs, LTL trucking companies often work with logistics companies to arrange, consolidate, time, and monitor shipments.
Local trucking services, whether TL or LTL, are typically offered within a metropolitan area and involve one-day trips.
Major inputs and expenses include drivers, diesel fuel, and repairs. Trucking companies often impose fuel surcharges to offset rising fuel prices. Large companies generally perform their own truck maintenance; small ones may outsource this function.
Nations such as China, Germany, the US, the UAE, and Singapore, according to FNC Americas.
The US general freight trucking industry includes about 80,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $190 billion.
The industry is comprised of carriers that transport commodities for shippers using a commercial motor vehicle (CMV). This profile covers general freight companies, including for-hire carriers and independent owner-operators, which transport a wide variety of commodities using containers or van trailers. Companies primarily engaged in flatbed, tanker, or refrigerated trailer transport are covered in the Specialty Trucking industry profile. Express delivery services and moving and storage companies are covered in separate profiles.
COMPETITIVE LANDSCAPE
The rapid growth of online shopping and quick delivery options is expected to change patterns of demand for trucking services. As the number of brick-and-mortar retail locations declines, so will demand for long-haul dry van trucking. However, online purchases will increase the need for less-than-truckload hauls, medium-duty commercial vehicles, short-haul, and last-mile transportation.
Demand for trucking is driven by consumer spending and manufacturing output. The profitability of individual companies depends on efficient operations. Large companies have advantages in account relationships, bulk fuel purchasing, fleet size, and access to drivers. Small operations can compete effectively by providing quick turnaround, serving a local market, or transporting unusually sized goods. The US industry is fragmented: the 50 largest companies account for 40% of revenue.
In addition to domestic consumption and production, US truck transportation depends heavily on free trade through the North American Free Trade Agreement (NAFTA). The top gateway for truck transport between the US and Canada is Detroit; the top gateway for US-Mexico truck transport is Laredo, Texas. Cross-border congestion is a problem for trucking companies specializing in NAFTA-related trade. Movement to or from Canada and Mexico can often be hampered by long lines and lengthy inspection processes.
Trucking competes with other forms of cargo transportation, including rail, air, and water. However, the shift toward intermodal transportation means that these modes of delivery are often more complementary than competitive.
Competitive Advantages:
Connected Trucks — Connectivity-enabled telematics that streamline trucking fleet efficiencies can trim operating costs and make companies more competitive. Intelligent data management is vital in helping fleets meet ongoing demand.
Fleet Flexibility — As more consumers shop online, fewer long-haul trucks will be needed to stock retail stores. Demand is forecast to shift toward less-than-truckload hauls, short-haul, and last-mile transportation. To remain competitive, trucking companies may seek to combine the right balance of service offerings with fleets that include more medium-duty vehicles.
Focus on Safety — By adopting advanced truck safety features early, trucking companies can reduce costs associated with accidents. Advanced driver-assistance systems — including collision mitigation and lane-departure warnings — can reduce the potential for human error, which is the cause of 90% of truck accidents, according to Boston Consulting Group.
Companies to Watch:
Knight-Swift Transportation — Formed by the 2017 combination of truckload carriers Knight Transportation and Swift Transportation, the company operates throughout North America. It also offers freight brokerage and intermodal services. Both the Knight and Swift brands are being maintained.
Schneider National — Through its Schneider National Carriers unit, the company provides truckload service throughout North America. The company also offers transborder freight, intermodal service, warehousing, and brokerage services, while subsidiary Schneider Logistics offers supply chain management services.
XPO Logistics — The company specializes in third party logistics (3PL) but added less-than-truckload carrier service with the purchase of Con-Way in 2015. XPO offers domestic and international freight forwarding services as well as truckload freight brokerage service to more than 50,000 customers across the US, Canada, Mexico, Asia, and Europe.
PRODUCTS, OPERATIONS & TECHNOLOGY
General trucking services include long-distance and local trucking. These classifications can be subdivided into truckload (TL) and less-than-truckload (LTL) services. Transportation of boxed, palletized, and other packaged goods by road account for about 60% of industry revenue. Transportation of other goods by road account for 10% followed by transportation of climate-controlled boxed and palletized goods and dry bulks transportation at more than 5%.
TL shipments have trailers dedicated to a single shipper's cargo. A trucking customer typically loads a trailer full (or nearly full); the trucker then transports the container, and a receiver unloads the contents. Shipments are usually delivered within one or two days, depending on the distance.
LTL shipments are a smaller but growing part of the market. LTL carriers transport the consolidated cargo of several shippers on one truck, dropping goods off at multiple delivery points. Long-distance LTL truckers typically operate a network of terminals connected by long-distance routes. Because most shipments involve transfers at terminals, delivery times for LTL shipments are generally longer than for TL shipments. To lower delivery costs, LTL trucking companies often work with logistics companies to arrange, consolidate, time, and monitor shipments.
Local trucking services, whether TL or LTL, are typically offered within a metropolitan area and involve one-day trips.
Major inputs and expenses include drivers, diesel fuel, and repairs. Trucking companies often impose fuel surcharges to offset rising fuel prices. Large companies generally perform their own truck maintenance; small ones may outsource this function.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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