Slower economic growth and flagging freight volumes didn’t keep the nation’s largest trucking companies from setting a revenue record in 2012.
The 50 largest motor carriers increased their combined revenue by $5.9 billion or 6.2 percent to $101.2 billion last year, passing the $100 billion mark for the first time, according to The Journal of Commerce Top 50 Trucking Companies list, based on data prepared by SJ Consulting Group in Pittsburgh. That 6.2 percent expansion was a step down from 2011, when the carriers on the Top 50 list increased revenue at an 11.6 percent pace, and even from 2010, when sales rose 9.3 percent.
In fact, the 2012 revenue growth rate was the third worst for the carriers on the Top 50 list since the JOC and SJ Consulting began compiling the data in 2003. Top 50 combined revenue rose 4.4 percent in 2008 and plunged 17.7 percent in 2009, the depths of the recession. In comparison, the 2011 growth rate was the second best in a decade, surpassed only by a 13.4 percent increase in revenue in 2004, as motor carriers recovered briskly from the U.S. recession that ended in 2003. From 2003 through 2008, the Top 50 added $32 billion to their top line, which dropped by $16.8 billion in 2009. In the economic recovery after 2009, the largest 50 carriers have grown by $23.1 billion.
If 2011 was a banner year for the Top 50, 2012 wasn’t entirely bad. Only four of the Top 50 reported lower sales in 2012, compared with one in 2011 and seven in 2010. And lower revenue can be a good thing: Trucking companies are increasingly focused on improving bottom-line profit rather than adding top-line revenue to gain market share. Some carriers have culled low-return accounts, reducing revenue and tonnage but boosting profit.
Long-troubled YRC Worldwide, the fourth-largest trucking operator, saw revenue from its less-than-truckload operations drop 0.4 percent from 2011 to $4.9 billion last year, but the holding company came closer to profitability than it had since 2008. The company’s largest subsidiary, YRC Freight, had an operating profit in the last two quarters, and its profitable regional carriers continued to bolster YRC’s finances. Truckload operator USA Truck, which ranked 40th on this year’s Top 50 list, saw revenue drop 1.3 percent to $512 million, while Dart Transit, ranked 47th, saw revenue fall 4.7 percent to $457 million. At 46th-ranked United Vision Logistics, revenue declined 11.9 percent to $458 million.
Of the remaining carriers, 45 increased sales growth year-over-year at a pace ranging from 0.4 percent to 28.6 percent. Last year, the pace was faster, with revenue rising between 0.4 percent and 35.1 percent. The largest Top 50 subgroup in 2012, numbering 20 carriers, increased revenue between 5 and 10 percent over the previous year. However, only two of those 20 carriers increased revenue by less than 10 percent in 2011. In that year, 20 carriers, or 40 percent of the Top 50, increased sales 10 to 15 percent.
Collectively, SJ Consulting’s data underscore the severity of the economic slowdown in 2012. In one year, 24 of the Top 50 slipped from double-digit to single-digit growth.
The Top 50 subgroup that grew 5 to 10 percent increased revenue 6.8 percent on average, a 7.6 percentage point decline from their 14.4 percent average increase the previous year. The subgroup — which included FedEx, the second-largest company on the list — accounted for $34.6 billion in revenue, about 34.1 percent of Top 50 revenue.
Altogether, 66 percent of the Top 50 increased revenue by 10 percent or less in 2012 with only 8 percent reporting double-digit growth and only two carriers increasing sales at a clip faster than 20 percent. Roadrunner Transportation Services, the hybrid LTL and truckload operator, was the fastest-growing trucking company on the list for the second straight year, its ascent fueled largely by acquisitions. But Roadrunner raised revenue 28.6 percent last year, compared with 35.1 percent in 2011 and 26.2 percent in 2010.
Overall, the Top 50 were checked in 2012 — slammed to the boards, in some cases — but managed to retain the momentum by which they recovered revenue lost in the recession in only two years. Last year, the Top 50 put more distance between themselves and the debacle of 2009 with slow and steady, albeit less-than-stellar, growth.
The annual data compiled by SJ Consulting provides a yardstick for measuring for-hire trucking growth, with the Top 50 list serving as a bellwether for the fortunes of the trucking industry. Top 50 combined revenue in 2012 was 29.6 percent higher than in 2009 and 61 percent higher than 2003, when the combined carrier revenue for the first Top 50 Trucking Companies list totaled $62.9 billion. That $38.3 billion expansion in Top 50 revenue over 10 years indicates that truckers are handling more freight, and data show the largest truckers are handling an increasingly larger share of those goods.
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The Top 50 carriers hauled 15.8 percent of the total $603.9 billion in freight the American Trucking Associations estimates for-hire and private carriers handled in 2011 (2012 data is not yet available from the ATA). That compares with 14.4 percent of the ATA industry total of $660.3 billion in 2008, and 14.3 percent of the total in 2009.
A 1.5 percentage point shift might not seem that big a deal, but remember that 1.5 percent of $600 billion is a whopping $9 billion.
At the worst point of the recession, when the Top 50 lost 17.7 percent of their revenue in 2009, trucking freight revenue as a whole shrank 17.6 percent, according to the ATA. From 2009 through 2011, while trucking as whole expanded 10.9 percent, Top 50 revenue rose 22 percent. When limiting the analysis to for-hire revenue, the gap narrows: Total for-hire trucking revenue increased 18.5 percent in those three years, the ATA said. But the Top 50 motor carriers still grew faster than the entire for-hire industry.
Another sign of consolidation at the top, in terms of revenue, is the rising number of motor carriers with more than $1 billion in annual sales. In addition to UPS and FedEx, 18 trucking companies on the Top 50 list made the billionaire’s box in 2012, compared with 16 in 2011 and 11 in 2009. That means seven trucking companies have increased annual revenue to more than $1 billion since the economic recovery began.
In 2012, truckload operators Kenan Advantage Group and CRST International, ranked 19th and 20th on the list, broke the $1 billion barrier. CRST increased revenue 25.4 percent in 2012, compared with 25 percent in 2011, and has raised its top line 48.4 percent since 2009, according to SJ Consulting data. Kenan, a bulk tank truck operator with several subsidiaries, improved sales 10.4 percent in 2012 after a 27.9 percent bump in 2011. Since 2009, Kenan has increased annual revenue 62.4 percent.
The other billion-dollar-plus companies include J.B. Hunt Transport Services, YRC Worldwide, Con-way, Swift Transportation, Schneider National, Landstar System, Old Dominion Freight Line, Werner Enterprises, Arkansas Best, U.S. Xpress Enterprises, Estes Express Lines, Prime, R+L Carriers, C.R. England, Greatwide Logistics and Saia.
Excluding UPS and FedEx, the only two companies with more than $10 billion in revenue on the Top 50 list, the billion-dollar carriers accounted for 40.7 percent of Top 50 revenue — $41.2 billion — about the same percentage of total Top 50 revenue as in 2011. Year-over-year, the group increased its combined revenue 6.5 percent. And for the first time, the billion-dollar group is the largest subgroup on the Top 50 list, taking that honor from the $400 million-to-$599 million revenue class. Ten years ago, there were only eight billion-dollar carriers on the list, including UPS.
Kenan’s and CRST’s step up left the next revenue class, $800 million to $999 million, with two fewer carriers. The class included Crete Carrier, Roadrunner, Knight Transportation and Southeastern Freight Lines. The truckload and LTL carriers increased their combined revenue 11.8 percent last year to $3.8 billion.
The $600 million-to-$799 million revenue class expanded the most in 2012, gaining five carriers from the $400 million-to-$599 million group, for a total of 13.
Those companies included Averitt Express, Universal Truckload Services, Quality Distribution, Trimac Group, Ruan Transportation Management Services, Vitran, Covenant Transport Group, Anderson Trucking Service, Ryder System, NFI Industries, Celadon Group, Stevens Transport and Marten Transport. The carriers in this group increased combined revenue 8.1 percent to $8.9 billion.
For the second consecutive year, no carriers with less than $400 million made the Top 50 list. In 2003, there were 17 carriers with less than $400 million in revenue among the Top 50, and eight of them had less than $200 million in annual revenue.
In 2012, the smallest of the Top 50, truckload carrier Western Express, had $435 million in revenue. That’s another sign of just how much the biggest trucking companies have grown during the past decade, despite the worst recession since the Great Depression.
The Top 50 face a mixed forecast for 2013, with much depending on how the economy weathers the sequester and whether manufacturing and employment make stronger gains than in 2011. There are some signs that freight volume, pricing and revenue may strengthen in the second half of the year. Tighter truck capacity could contribute to faster revenue growth among those carriers best able to quickly deploy tractor-trailers where needed.
If so, the Top 50 will expand not only revenue, but also their share of the trucking market.