Largest US truckload carriers gain pricing power

Largest US truckload carriers gain pricing power

The largest U.S. truckload carriers enjoyed much stronger growth in 2014, aided by solid economic expansion, several mergers and acquisitions and mounting pricing power.

The 25 largest U.S. truckload carriers increased their combined revenue by 8 percent to $27.8 billion last year, according to The Journal of Commerce’s 2015 list of the Top 25 TL Carriers, prepared by SJ Consulting. That compares with a 0.6 percent increase in 2013, when those truckers had $25.7 billion in sales, according to SJ Consulting.

U.S. gross domestic product growth of 4.6 percent and 5 percent in the second and third quarters of 2014 helped large truckload carriers make sizable gains in revenue last year.

Seven of the 25 boosted revenue by double digits, compared with three carriers in 2013. The “floor” of the rankings rose above the $500 million mark for the first time, as no truckload carriers with less than $500 million in revenue made the SJ Consulting rankings in 2014.

Truckload carrier growth rates last year ranged from 2.3 percent to 56.4 percent, compared with 0.8 percent and 14.6 percent in 2013. Revenue dropped at three carriers in 2014, compared with nine on the previous year’s Top 25 Truckload list. The largest revenue drop last year was 7.1 percent, compared with 15.1 percent in 2013, according to SJ Consulting.

In terms of rankings, the list proved volatile in 2014, another sign of renewed freight activity and more numerous acquisitions in the market compared with a slower-paced 2013.

Landstar System rose from fifth place to the third ranking last year, changing places with Werner Enterprises, on an 11.7 percent increase in revenue. Prime rode a 12.9 percent revenue spike to sixth place, while U.S. Xpress Enterprises dropped to seventh.

After completing the acquisition of Gordon Trucking, Heartland Express rose from 19th place in 2013 to rank as the 12th-largest truckload carrier in 2014, displacing Greatwide Logistics/Cardinal Logistics, which dropped to the 15th ranking. Celadon Group, which made nine trucking acquisitions in 2014, rose from 18th place to 16th. Roadrunner Transportation, which didn’t even make the list in 2013, ranked 17th in 2014 and was the fastest-growing carrier on the list, thanks to numerous truckload acquisitions.

In all, there were 10 billion-plus-dollar carriers on the list, starting with Swift Transportation, the largest U.S. truckload carrier, which increased truckload revenue 9.9 percent to $3.6 billion last year, according to SJ Consulting (the research group only measures truckload revenue for its ranking, excluding revenue from intermodal and other services).

The 10 truckload carriers in the billion-dollar-plus revenue category increased their combined revenue 6.5 percent to $17.7 billion. That compares with a 0.4 percent increase to $16.6 billion in 2013, based on SJ Consulting data. The remaining Top 25 carriers raised combined revenue 10.8 percent to $10.1 billion, compared with a 0.9 percent gain in 2013.

Even with those strong gains in 2014, the truckload industry remains highly fragmented, and the Top 25 TL Carriers account for only a small portion of total truckload revenue. In 2013, the 25 largest U.S. truckload carriers controlled only 8 percent of a $321.7 billion market, according to figures from SJ Consulting and the American Trucking Associations.

In comparison, the 25 largest less-than-truckload carriers controlled 89.4 percent of total LTL revenue in 2013, and 91.1 percent of that $35.4 billion trucking market in 2014.

Contact William B. Cassidy at wcassidy@joc.com and follow him on Twitter:@wbcassidy_joc.