First Research US Industry Profile

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SIC Codes: 4213
NAICS Codes: 4841
Last Quarterly Update: 5/20/2019
Companies in this industry provide long-distance and local trucking, including truckload (TL) and less-than-truckload (LTL) services. Major companies include US-based JB Hunt, Knight-Swift Transportation, Schneider National, XPO Logistics, and YRC Worldwide, as well as Hitachi Transport System and Seino Transportation (Japan), Eddie Stobart (UK), and TFI International (Canada).
Large, wealthy nations such as the US, Japan, and Germany are top markets for trucking, but growth in emerging markets has prompted some companies to expand overseas. China, in particular, has attracted investments from large trucking service providers based in North America and Europe.
The US general freight trucking industry includes about 75,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $165 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 NAFTA. Trade with Canada and Mexico represents about one-third of all US trade. 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 systems that streamline trucking fleet efficiencies can trim operating costs and make companies more competitive. Consulting firm Frost & Sullivan expects the global connected truck fleet to rise to 35 million vehicles by 2020.
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 (85% of industry revenue) and local (15%) trucking. These classifications can be subdivided into truckload ... plus:
Sales & Marketing
Finance & Regulation
Regional & International Issues
Human Resources
Also includes the following chapters:
Quarterly Industry Update
Industry Indicators
Business Challenges
Trends and Opportunities
Call Preparation Questions
Financial Information
Industry Forecast
Industry Websites
Glossary of Acronyms

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