An XPO logistics truck.

As long as freight demand remains steady, there seems to be little that could slow the Top 50 down. Photo credit: XPO Logistics.

A second-half surge in freight demand and economic activity last year fueled the most rapid acceleration in three years at the largest US trucking companies, with 90 percent of JOC.com’s Top 50 US Trucking Companies expanding their revenue year over year.

As long as freight demand remains steady, there seems to be little that could slow the Top 50 down. If the US economy keeps up its pace, the truckload, less-than-truckload (LTL), parcel, intermodal, and other carriers in the Top 50 rankings could see double-digit revenue growth in 2018.

That revenue growth will come at the expense of higher transportation costs and pricing for shippers. But that revenue also will fuel the profitability trucking operators say they need to reinvest in equipment and drivers, improve service, and offer sustainable capacity.

In 2016, only 50 percent of the trucking companies in the Top 50 rankings, prepared for JOC.com by SJ Consulting Group, increased revenue, and at a much slower pace, as the US economy trudged through the second “soft patch” in the recovery from the 2007 to 2009 recession.

Those numbers underscore the solidity and strength of the freight recovery that lifted motor carriers out of a two-year morass starting last September, tightening shipper access to capacity and sending truck pricing to its highest level since the economic recovery began in 2009. In 2017, 16 of the Top 50 trucking companies expanded their top lines by double digits, with 11 carriers growing by 10 to 15 percent, two by 15 to 20 percent, and three more than 20 percent. Only three of the Top 50 in 2016 saw revenue jump more than 10 percent.

Top 50: a yardstick

The annual Top 50 rankings serve as a yardstick to measure the growth of trucking and track its recovery from the last recession. The combined revenue of the Top 50 carriers has increased 78 percent since the recovery began in 2009, from a base of $78.1 billion in revenue.

Three consecutive quarters of healthier US real GDP expansion in 2017, with the growth rate rising above 3 percent in two consecutive quarters, returned the Top 50 trucking companies to the fast lane they exited abruptly in 2015, following an overheated 2014. In 2009, Top 50 revenue plunged 17.7 percent from its previous peak of $94.9 billion in 2008. Getting back above that milepost took the Top 50 another two years, but trucking’s recovery in this decade proved stronger, and longer, than the recovery from the 2002 to 2003 recession.

US GDP expanded 2.9 percent in the fourth quarter, according to the latest estimate from the US Bureau of Economic Analysis. One reason the GDP growth rate dropped below 3 percent was an increase in imports, which depressed GDP but also filled tractor-trailers and containers.

The elimination of an inventory glut that depressed freight levels in 2015 and 2016 also restored some supply chain balance and led to higher replenishment demand and freight revenue last year. Rising inventory levels pulled more freight into the international pipeline and the United States.

The Top 50 carriers did not grow as quickly as they did in 2014, or in 2010 and 2011, but economic growth has been steadier in 2017 and early 2018. So far, there is no sign of a recession on the horizon. IHS Markit expects US GDP to expand about 3 percent in 2018.

Total Top 50 revenue rose 7.8 percent in 2017, compared with 5.8 percent in 2016 and 3.1 percent in 2015. In 2014, when US GDP shot up 5.2 percent in the third quarter, Top 50 trucking revenue leaped 10 percent. Top 50 revenue climbed 9.3 and 11.6 percent in 2010 and 2011, respectively.

Last year’s revenue gains reflect increased volumes and higher rates at the truckload, LTL, and intermodal and specialized carriers that comprise the Top 50 motor carriers. The companies’ trucking revenue ranged from $566 million to $33.9 billion.

(SJ Consulting excludes non-trucking revenue when calculating the rankings, which is why some revenue figures do not correspond to published data for publicly owned companies with diverse transportation and logistics revenue streams, UPS and FedEx being examples.)

Revenue also reflects surcharges 

Revenue gains also reflect higher surcharges, pumped up by a 14.3 percent rise in US retail diesel prices during 2017, as tracked by the US Energy Information Administration. The April 2 average US diesel retail price of $3.04 was 48.6 cents higher than a year ago.

The Top 50 carrier group achieved record combined revenue of $139.4 billion last year, up $10 billion. Last year, 2017, was the sixth year the Top 50 exceeded $100 million in revenue. Since 2003, the first year JOC published this report, Top 50 revenue has risen by $76 billion.

The growth of the Top 50 trucking companies in terms of revenue last year exceeded even the growth of the Top 25 Truckload and LTL carriers of 2017 combined. Those 50 companies increased revenue 6.7 percent year over year.

The benefits of the 2017 Tax Cuts and Jobs Act passed in December and stimulus spending included in the omnibus spending law are expected to fuel economic expansion in the United States in 2018, while IHS Markit forecasts 3.5 percent growth in the global economy in 2018 and 2019.

Barring any disruption from potential trade battles, that growth should keep imports flowing into the United States and into tractor-trailers and intermodal rail containers this year. And that means the current pressure on capacity and truckload, LTL, and intermodal rates is unlikely to let up.

Shipper expenditures hit a historic high this February, according to the Cass Freight Index, climbing 14.3 percent from a year ago. The Cass Truckload Linehaul and Intermodal Pricing indices also hit new records, rising 6.5 percent and 5.4 percent in February, respectively.

“Although a seasonally weak month part of the year, February was roughly equal to the peak month in 2014, which is extraordinary,” Cass index author Donald Broughton of Broughton Capital said. “This is indicative of an economy that is continuing to expand.”

Also indicative of an expanding economy is the revenue expansion of the Top 50 motor carriers. Thirteen of the companies increased revenue by 10 to 20 percent last year, compared with one in 2016. Seventeen carriers increased revenue by 5 to 10 percent in 2017, compared with four the previous year.

The Top 50 trucking companies keep getting bigger. Although trucking is a fragmented industry, the 50 largest US trucking companies took in close to 20 percent of the $676.2 billion in trucking revenue, for-hire and private, reported by the American Trucking Associations in 2016.

The US trucking industry comprises hundreds of thousands of companies, most with fewer than 10 trucks, but the fact that the largest 50 companies command such a large share of the market underscores their importance in moving high volumes of freight for shippers.

Acquisitions played a role in the fast growth of some of the largest US trucking companies. The fastest-growing company among the Top 50 was NFI Industries, which acquired California Cartage last October. SJ Consulting estimates NFI’s revenue increased 43 percent to $1.1 billion.

TFI International, the Montreal-based trucking conglomerate formerly known as TransForce, increased US revenue 31.1 percent to $1.6 billion, following a long series of trucking acquisitions aimed at increasing its business on the southern side of the US-Canadian border.

Daseke also has grown by merging carriers into its specialized and heavy-haul trucking organization, increasing revenue 29.8 percent to $846 million last year. Truckload carrier CRST International bolstered revenue 19.3 percent to $1.6 billion after acquisitions in 2015 and 2016.

But organic growth also spurred many of the Top 50 to double-digit growth. Landstar System increased revenue 15.2 percent to $3.7 billion; Estes Express Lines, 14.8 percent to $2.5 billion; Dayton Freight Lines, 14.5 percent to $571 million; and Saia, 13.1 percent to $1.4 billion.

LTL carrier Saia, No. 21 among the Top 50, expanded into the Northeast, opening six terminals there in 2017 and planning to open six more this year. Old Dominion Freight Line, ranked 10th among the Top 50, invested in facilities and increased revenue 12.3 percent.

Perhaps the most blatant sign of widespread turnaround, however, was the drop last year in the number of Top 50 companies that saw revenue decline. In 2016, revenue declined at 24 companies in a range from 0.2 to 16.8 percent. In 2017, revenue dropped at only five companies.

The lowest carrier revenue in the rankings was $566 million, compared with $498 million the previous year and $462 million in 2015. This year’s smallest of the Top 50, truckload carrier Western Express, had $44 million more revenue than the smallest Top 50 carrier in 2014.

Compare that with the first Top 50 ranking, in 2003, when eight of the largest US trucking companies had less than $200 million in annual revenue and 23 carriers had less than $500 million in annual sales. Trucking’s growth, despite the recession, has been remarkable.

$1 billion club

In 2003, there were only 12 US trucking operators with more than $1 billion in annual revenue. In 2017, there were 28. That “billion-dollar club” has grown by eight companies in five years.

A closer look at the Top 50 in the 2012 to 2017 period shows a corresponding sharp decrease in the number of companies with $400 million to $600 million in revenue. From 13 in 2012, the under $600 million revenue class shrank to three carriers last year, down from six in 2016.

Revenue in that class dropped 4.7 percent to $15.7 billion last year as two carriers moved higher in the rankings. Revenue has long flowed upstream among the Top 50, pushing more carriers into higher revenue classes, mostly the $1 billion to $10 billion revenue class.

Those billion-dollar carriers, excluding UPS and FedEx, raised combined revenue 11.4 percent to $65.8 billion. Their average increase was 9.3 percent. That beat even the 7.6 percent increase posted by the parcel carriers, which had combined trucking revenue of $58 billion.

How have the thousands of smaller carriers fared while the largest trucking companies became even larger? By most reports, they did pretty well, too, in 2017, as spot market truckload rates began to rise by double-digit percentages and shippers scrapped for truck capacity.

The number of active, for-hire carriers with one to six trucks rose 4.4 percent to 178,950 in the first six months of 2017, according to QualifiedCarriers.com, a risk management company for shippers. Many of those carriers doubtless grew faster, on a percentage basis, than the Top 50.

A related measure of interest is the growth rate of the Top 25 LTL carriers in 2017, compared with the rest of the LTL industry, which includes hundreds of small cartage companies. The largest carrier increased revenue 7.8 percent, but the remainder grew 8.5 percent.

Whether looking at it from the top down or bottom up, trucking is a growth business again.

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

 

2016 Top 50 trucking Companies

In millions of US dollars.
Rankparent companyPrimary ServicePublic/
Private
2016 Revenue2017 Revenue2016-2017 Percent GrowthSubsidiary Portfolio/Services and Comments
1United Parcel Service ParcelPublic$31,770.00$33,926.006.8%Ground, Freight, Brokerage
2FedEx*ParcelPublic$22,127.00$24,055.008.7%FedEx Ground, FedEx Freight, FedEx Custom Critical
3J.B. Hunt Transport Services IMCPublic$6,555.00$7,190.009.7%Truckload, Dedicated Contract Service, Intermodal, Integrated Capacity Solutions
4XPO LogisticsLTL/IMCPublic$6,860.00$7,123.003.8%Acquired Con-way in October 2015; sold former Con-way Truckload to TFI in October 2016
5YRC Worldwide LTLPublic$4,698.00$4,891.004.1%YRC Freight, Holland, Reddaway, New Penn
6Swift TransportationTLPublic$4,032.00$4,051.000.5%Dry-Van, Refrigerated, Dedicated, Intermodal; part of Knight-Swift Transportation as of September 2017
7Hub GroupIMCPublic$3,573.00$4,035.0012.9%Hub, Mode, Unyson
8Schneider NationalTLPublic$3,506.00$3,746.006.8%Truckload, Intermodal, Brokerage
9Landstar SystemTLPublic$3,172.00$3,655.0015.2%Dry-Van, Flatbed, LTL, Intermodal
10Old Dominion Freight Line LTLPublic$2,992.00$3,358.0012.3%Most profitable asset-based publicly held trucking company
11ArcBestLTLPublic$2,496.00$2,636.005.6%ABF Freight, ABF Logistics, Panther Premium Logistics
12Estes Express LinesLTLPrivate$2,157.00$2,476.0014.8%Largest privately owned LTL carrier
13Werner Enterprises TLPublic$2,009.00$2,117.005.4%One-way Truckload, Dedicated, Value-Added Services
14PrimeTLPrivate$1,747.00$1,931.0010.5%Prime Refrigerated, Prime Flatbed, Prime Tanker
15Roadrunner Transportation
Services
TLPublic$1,709.00$1,666.00-2.5%Asset-light LTL and Truckload
16R & L CarriersLTLPrivate$1,452.00$1,580.008.8%LTL, Truckload
17TFI InternationalTLPublic$1,201.00$1,574.0031.1%U.S revenue only. Includes Dynamex, Transport America, CFI, and Hazen Final Mile
18U.S. Xpress EnterprisesTLPrivate$1,451.00$1,555.007.2%U.S. Xpress, Total Transportation, Xpress Global Systems
19CRST InternationalTLPrivate$1,303.00$1,555.0019.3%Acquired Pegasus Transportation in April 2015 and Gardner Trucking in September 2016
20Kenan Advantage Group TLPrivate$1,421.00$1,473.003.7%Acquired by OMERS Private Equity in June 2015; acquired Agri-Carriers Group in September 2016
21Saia LTLPublic$1,218.00$1,379.0013.1%Saia LTL Freight, Saia TL Plus, LinkEx
22C.R. England TLPrivate$1,210.00$1,282.005.9%Truckload, Intermodal, Brokerage
23Averitt ExpressLTLPrivate$1,091.00$1,147.005.1%LTL, Truckload, Dedicated
24Knight Transportation TLPublic$1,118.00$1,134.001.5%Dry-Van, Refrigerated, Dedicated, Intermodal, Drayage, Brokerage; part of Knight-Swift Transportation as of September 2017
25Southeastern Freight LinesLTLPrivate$1,043.00$1,116.007.0%LTL, Truckload
26NFI IndustriesTLPrivate$775.00$1,108.0043.0%Dedicated, Intermodal, Brokerage
27Celadon Group*TLPublic$1,055.00$1,012.00-4.0%Made five acquisitions since June 2014
28Crete Carrier Corp.TLPrivate$984.00$1,005.002.1%Crete Carrier, Hunt Transportation, Shaffer Trucking
29Ryder System TLPublic$837.00$899.007.4%Dedicated Contract Carriage
30 Alliance Shippers IMCPrivate$822.00$876.006.5%Intermodal, Brokerage
31Forward AirDeferred AirPublic$764.00$859.0012.4%Expedited LTL, Premium Truckload, and Intermodal
32Universal Truckload ServicesTLPublic$763.00$854.0012.0%Truckload, Drayage
33DasekeTLPrivate$652.00$846.0029.8%Merged with Hennessy Capital Corp. in Dec. 2016 and went public in February 2017
34Cardinal LogisticsTLPrivate$803.00$793.00-1.3%Cardinal Logistics, Greatwide Logistics
35Quality Distribution TLPrivate$758.00$786.003.7%Quality Carriers, Boasso America, QC Energy; acquired by Apax Partners in August 2015
36Ruan Transportation
Management Services
TLPrivate$750.00$764.001.8%Dedicated, Bulk
37Central TransportLTLPrivate$703.00$754.007.2%LTL
38Pitt OhioLTLPrivate$649.00$716.0010.2%LTL, Truckload, Ground
39Covenant Transportation Group TLPublic$671.00$705.005.1%Covenant Transport, Southern Refrigerated Transport, Star Transportation, Covenant Transport Solutions
40Marten Transport TLPublic$671.00$698.004.0%Truckload, Dedicated, Intermodal, Brokerage
41Penske LogisticsTLPrivate$642.00$697.008.6%Dedicated
42AAA Cooper TransportationLTLPrivate$603.00$664.0010.3%LTL, Dedicated
43United Road ServicesTLPrivate$553.00$614.0011.0%Motor vehicle trucking
44Jack Cooper TransportTLPrivate$668.00$613.00-8.2%Motor vehicle trucking
45Heartland Express TLPublic$613.00$607.00-0.9%Acquired Interstate Distributor Co. in July 2017
46Stevens TransportTLPrivate$589.00$607.003.0%Truckload, Intermodal
47Anderson Trucking ServiceTLPrivate$593.00$605.002.0%Dry-Van, Specialized, Heavy Haul
48KLLMTLPrivate$556.00$580.004.3%KLLM, FFE Transportation
49Dayton Freight LinesLTLPrivate$498.00$571.0014.5%LTL, Truckload
50Western ExpressTLPrivate$528.00$566.007.3%Dry-Van, Flatbed
Total Revenue for the Top 50 Trucking Companies$129,408.00$139,448.007.8% 
*Results adjusted to closer resemble calendar year.
Note: Companies listed have primary operations in the United States. Includes brokerage revenue of listed trucking companies, but excludes pure brokers.
Includes intermodal revenue for companies with container ownership.
Source: Company reports; SJ Consulting estimates
Prepared by SJ Consulting Group