JOC Rankings: US trucking revenue growth slams on the brakes

JOC Rankings: US trucking revenue growth slams on the brakes

Revenue growth among the Top 50 US Trucking Companies slowed from 12.2 percent in 2018 to 1.3 percent in 2019. Photo credit: Shutterstock.com.

US trucking companies suffered a swift reversal of fortune last year, as the strongest freight market since the 2009 recession softened amid slower economic growth and a decline in domestic manufacturing activity. The 50 largest US trucking operators still managed to eke out combined revenue growth of 1.3 percent in 2019, but that was the slowest rate in 10 years and a severe deceleration from a 12.2 percent revenue gain in 2018, according to the latest annual Top 50 US Trucking Companies rankings prepared for JOC.com by SJ Consulting Group.

However, by the end of this year — or even the end of the second quarter — those carriers may look back more fondly on that 1.3 percent growth rate. The reaction to the new coronavirus disease 2019 (COVID-19) pandemic has tipped the US economy into a recession with unprecedented speed, with unemployment claims spiking to a record 3.3 million in late March as businesses shut down in an effort to slow the outbreak’s spread.

The widespread closure of stores, restaurants, and factories froze freight-generating economic activity at the end of the first quarter, a time when trucking firms typically prepare for the busy spring retail season. That season has largely shifted online this year, with most “non-essential” retail stores, large and small, closed and home-bound consumers turning to digital consumption channels.

Whether the 2020 recession will push down the annual revenue generated by the top 50 US trucking providers depends on the length and depth of the contraction in economic growth and the strength of the recovery, which IHS Markit, the parent company of JOC.com, expects to begin in August. Consumers kept trucks rolling in 2019, but this year is shaping up differently.

The meager growth among the 50 largest truck carriers last year took the combined revenue of those firms to $158.9 billion, another sign that while the US economy slowed in 2019, it didn’t stop.

Short-term volatility, long-term stability

Although the carriers in the Top 50 rankings have increased their combined revenue in every year since the 2009 recession, growth rates have fluctuated from year to year. Revenue gains slowed as the economic recovery went through soft patches, the first in 2012 and 2013, when the growth rate slumped to 5.7 percent, and the second in 2015 and 2016, when the growth rate averaged 4.5 percent.

By contrast, last year’s 1.3 percent uptick in revenue was the slowest growth rate since 2009, when total revenue for the top 50 carriers plummeted 17.7 percent. It took two years to recover that $16.7 billion shortfall. The combined year-over-year growth rate has exceeded 10 percent three times since 2009, in 2011 (11.6 percent), 2014 (10 percent), and 2018 (12.2 percent). The largest percentage gain took place in 2004, when revenue jumped 13.4 percent.

The top 50 trucking companies increased revenue 7.3 percent on average from 2010 through 2019, falling below that percentage in 2012, 2013, 2015, 2016, and 2019. For trucking, the 10-year economic expansion that began in 2009 was stronger than it sometimes felt.

Since the end of the 2009 recession, the 50 largest US motor carriers have more than doubled their combined revenue, raising it by more than $80 billion from $78.1 billion in 2009. From 2003 through 2008, the group increased revenue by $32 billion, a 51 percent gain, underscoring the long-term growth of the largest US trucking companies.

Despite volatile spikes and drops in trucking revenue in recent years, the five-year compound annual growth rate (CAGR) for the top 50 trucking groups has remained stable at 5.1 percent to 5.8 percent since 2015. The CAGR was 5.4 percent in 2019. Trucking may be buffeted by economic storms and pandemics, but its long-term trajectory is still one of relatively stable growth.

That’s true for individual companies as well as the group as a whole. In 2003, there were just 12 trucking companies with more than $1 billion in annual revenue. In 2019, there were 32 carriers in that “billion-dollar club,” accounting for $145.3 billion in combined revenue, or 91.4 percent of the total revenue for the group.

Although trucking is a highly fragmented industry, with more than 246,000 active carriers, according to Tucker Company Worldwide and QualityCarriers.com, the 50 largest carriers still command an impressive amount of revenue, about 38 percent of for-hire market trucking revenue, which the American Trucking Associations (ATA) estimated at $417.4 billion in 2018.

Of the top 50 trucking companies, 29 carriers increased revenue in 2019, while 21 saw revenue decline. By contrast, only one company among the top 50, the now-defunct Celadon Group, saw its revenue drop in 2018. The most recent comparable decrease was in 2016, when 25 of the top 50 carriers reported revenue declines.

However, a company-by-company comparison of five-year CAGRs reveals that most of the operators have expanded over the long term, with only four of those in the 2019 rankings losing revenue over the past five years. Some companies, such as Celadon and New England Motor Freight, went out of business last year and dropped off the list.

Individual carrier revenues stretched from the $37.8 billion in trucking-related revenue SJ Consulting Group estimated for UPS (excluding its air package and other non-trucking revenue), to $541 million at truckload carrier Mercer Transportation. Only 18 of the Top 50 trucking companies had less than $1 billion in revenue last year, the same number as in 2018.

Squeezing the middle

For the Top 50 US Trucking Companies rankings, operators are divided into five revenue classes: $10 billion and up, $5 billion to $10 billion, $3 billion to $5 billion, $1 billion to $3 billion, and less than $1 billion. Last year, the very largest providers grew, as did carriers in the two lowest revenue classes, but those in the middle two groups did not.

There are only two companies in the $10 billion-plus class, UPS and FedEx, which owns the largest US trucking company, FedEx Freight. The combined trucking-related revenue of these companies rose 3 percent to $66.6 billion, representing 42 percent of the larger group’s total revenue. In 2003, UPS and FedEx reported just $22.3 billion in trucking-related revenue.

Likewise, the $5 billion-to-$10 billion revenue class also has just two companies, J.B. Hunt Transport Services and XPO Logistics. J.B. Hunt increased trucking-related revenue, which includes revenue from truckload, intermodal, dedicated, and brokerage operations, 6.4 percent in 2019, but XPO saw trucking-related revenue drop 7.4 percent, bringing total revenue for the class down 0.2 percent from 2018 to $16.4 billion.

The hardest-hit group was the $3 billion-to-$5 billion revenue class, which saw revenue drop 5.4 percent to $25.6 billion in 2019. Five of the six trucking companies in that group — YRC Worldwide, Knight-Swift Transportation, Landstar System, Schneider National, and Hub Group — saw revenue drop, with the declines ranging from 0.4 percent to 11.7 percent. Within the group, only Old Dominion Freight Line (ODFL) increased revenue for the year. The less-than-truckload (LTL) carrier’s top line rose 1.6 percent to $4.1 billion, but that was still a far cry from ODFL’s 20.4 percent revenue increase in 2018, according to SJ Consulting Group.

The $1 billion-to-$3 billion and under-$1 billion revenue groups both saw slight increases in overall revenue. The $1 billion-to-$3 billion group, which includes 22 carriers, edged its combined revenue up 1.2 percent to $36.6 billion. Sixteen of those carriers increased revenue, led by Penske Logistics, the fastest-growing carrier with a 20.8 percent revenue gain.

Roadrunner Transportation Services was also in that group, with $1.6 billion in trucking-related (non-logistics) revenue, according to SJ Consulting Group. That was down 14.5 percent from 2018, the biggest revenue drop among the top 50 carriers. On March 26, Roadrunner reported a 16.6 percent drop in total revenue for 2019 to $1.8 billion.

The 18 companies in the under-$1 billion revenue class were evenly split in terms of growth, with nine increasing revenue and nine reporting a drop. PS Logistics, a new company in the rankings, saw revenues rise 13.8 percent to $851 million, SJ Consulting Group reported. Mercer Transportation’s revenue, meanwhile, fell 10.3 percent to $541 million after rising 22.3 percent in 2018.

Perhaps most striking, only two of the 50 largest US trucking companies grew revenue by double-digit percentages last year, compared with 32 in 2018, and the range of growth rates was much more restricted. When ranked by growth rate, rather than revenue, only one carrier, PS Logistics, increased revenue in the 10 to 20 percent range, compared with 20 in 2018.

In 2019, 17 of the top 50 carriers increased revenue less than 5 percent, compared with five companies in 2018. Twenty-one operators saw revenue drop in 2019, compared with just one in 2018. Among those companies, three saw revenue drop between 10 and 15 percent — Roadrunner, Landstar System, and Mercer — six reported decreases of between 5 and 10 percent, and 12 saw revenue slip between 0 and 5 percent.

But revenue isn’t the only metric for success. A ranking of the 50 most profitable US trucking operators would look very different and would include many much smaller companies. Even so, revenue is a strong indicator of the trucking demand that generates sales, and with coronavirus prevention measures sending the US economy into a temporary tailspin, the top 50 will have a hard time reversing the trends of 2019 in 2020.

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy.

JOC Top 50 US Trucking Companies 2019

In millions of dollars.
2019 rankParent CompanyPrimary servicePublic/ Private2018 revenue2019 revenue2018-2019
% change
 
1United Parcel Service of AmericaParcelPublic$36,382$37,7763.8%
2FedEx Corporation*ParcelPublic$27,242$28,8425.9%
3J.B. Hunt Transport Services IMCPublic$8,615$9,1656.4%
4XPO LogisticsLTLPublic$7,815$7,240-7.4%
5YRC Worldwide LTLPublic$5,092$4,871-4.3%
6Knight-Swift TransportationTLPublic$5,344$4,844-9.4%
7Old Dominion Freight Line LTLPublic$4,044$4,1091.6%
8Landstar SystemTLPublic$4,651$4,109-11.7%
9Schneider NationalTLPublic$4,263$4,009-6.0%
10Hub GroupIMCPublic$3,684$3,668-0.4%
11Estes Express LinesLTLPrivate$2,761$2,8182.1%
12ArcBest Corp.LTLPublic$2,886$2,814-2.5%
13Werner Enterprises TLPublic$2,458$2,4640.2%
14Prime IncTLPrivate$2,324$2,4324.7%
15R & L CarriersLTLPrivate$1,901$1,9723.7%
16Saia LTLPublic$1,654$1,7878.0%
17Kenan Advantage Group TLPrivate$1,730$1,7591.7%
18TFI InternationalTLPublic$1,710$1,7542.5%
19DasekeTLPublic$1,613$1,7377.7%
20U.S. Xpress EnterprisesTLPublic$1,805$1,707-5.4%
21CRST InternationalTLPrivate$1,685$1,561-7.4%
22Roadrunner Transportation
Services
TLPublic$1,815$1,552-14.5%
23C.R. England TLPrivate$1,461$1,407-3.7%
24Ryder System TLPublic$1,261$1,3678.3%
25Averitt ExpressLTLPrivate$1,298$1,3181.5%
26Southeastern Freight LinesLTLPrivate$1,237$1,2420.4%
27Evans Network of CompaniesDrayagePrivate$1,185$1,2203.0%
28NFI IndustriesTLPrivate$1,222$1,195-2.2%
29Universal Truckload ServicesTLPublic$1,087$1,1717.8%
30Crete Carrier Corp.TLPrivate$1,151$1,1510.1%
31Penske LogisticsTLPrivate$919$1,11020.8%
32Forward AirTLPublic$1,032$1,1026.8%
33Alliance ShippersIMCPrivate$1,011$993-1.8%
34Covenant Transportation Group TLPublic$885$8951.0%
35Ruan Transportation
Management Services
TLPrivate$813$8858.9%
36Central TransportLTLPrivate$825$8563.8%
37Pitt Ohio Transportion GroupLTLPrivate$823$8564.0%
38PS LogisticsTLPrivate$747$85113.8%
39Marten Transport TLPublic$788$8437.1%
40Quality Distribution TLPrivate$822$789-4.0%
41United Road ServicesTLPrivate$715$7799.0%
42Cardinal LogisticsTLPrivate$805$776-3.6%
43AAA Cooper TransportationLTLPrivate$725$7300.6%
44Dayton Freight LinesLTLPrivate$666$6863.0%
45Western ExpressTLPrivate$695$685-1.5%
46Stevens TransportTLPrivate$667$646-3.1%
47Anderson Trucking ServiceTLPrivate$674$636-5.6%
48KLLMTLPrivate$637$620-2.7%
49Heartland Express TLPublic$611$597-2.3%
50Mercer TransportationTLPrivate$603$541-10.3%
Total Revenue for the Top 50 Trucking Companies  $156,838$158,9351.3%
 
* Results adjusted to closer resemble calendar year
Note: Companies listed have primary operations in the US. Includes brokerage revenues of listed trucking companies but excludes pure brokers.
Includes intermodal revenues for companies with container ownership
Source: Company Reports, SJC estimates
Prepared by SJ Consulting Group, Inc.