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March 18 2019

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36 The Journal of Commerce | March 18 2019 www.joc.com Special Report THE US TRUCKING industry hit the economic accelerator so hard last year some fear a hard-braking event ahead. So far in 2019, however, most trucking companies and their shipper customers have been able to shift gears successfully as they prepare for a spring retail freight surge that may tighten capacity in a market still shocked by last year's chaotic first half. From January through July of 2018, strong freight demand driven by US economic expansion and con- cerns over US tariffs and trade wars collided with high truck utilization rates and tighter regulation of truck drivers, shooting truck pricing into the stratosphere, with contract rates rising by high single digits on average and spot truckload rates by double-digit percentages. That spurred double-digit rev- enue growth at the largest US less- than-truckload and truckload carri- ers last year as industrial production, consumer spending, and freight volumes rose. For truckers, "it was the year of Christmas," said Satish Jindel, president of SJ Consulting Group, Warrendale, Pennsylvania. If so, truck shippers wound up footing the Christmas bill. Shippers hope for some relief in 2019 after a budget-busting 2018. "The good news is 2018 has ended," Coca-Cola CEO James Quincey said while discussing transportation rates during a Feb. 14 earnings call. "While freight costs are expected to remain above historical levels, we do not ex- pect to see the same level of year-over- year increases as we saw last year." 2018 a great year Those increases fueled signifi- cant revenue growth at truckload and LTL companies. The combined revenue of the 25 largest US LTL carriers rose 10.7 percent in 2018 to $38.7 billion, after rising a revised 8.7 percent in 2107 and flattening in 2016 at $32.1 billion. That's a 20 percent jump in revenue over two years, with the biggest gains in 2018, according to The Journal of Commerce annual ranking of the Top 25 US LTL Carriers, prepared by SJ Consulting Group. Last year's 10.7 percent growth rate was the highest for the Top 25 LTL carriers since 2011, when they grew 12.4 percent after a 9 percent post-recession revenue jump in 2011. Overall, the LTL sector increased revenue 10.4 percent last year, push- ing past the $40 billion mark for the first time to $42.6 billion. That mile- stone reflects the strength of the US manufacturing economy, which has been expanding for 118 months, as well as consumer spending, which increased by $54.4 billion, or 0.4 percent, last November alone. For LTL and truckload carriers alike, e-commerce and imports played a role in expanding topline revenue. Smaller LTL companies — those that didn't make the Top 25 rankings — saw revenue growth slow, likely as the 25 largest LTL carriers pulled some revenue from them. Those smaller trucking companies, prob- ably hundreds if not thousands of local carriers, raised their combined revenue 8.2 percent to about $4 billion, about 9.3 percent of total US LTL industry revenue. In the previous year, those companies increased revenue 8.5 percent, following years of Top 25 LTL and truckload carriers saw growth explode in 2018, but expectations are more muted this year By William B. Cassidy A slower gear Top 25 Truckload and LTL Carriers

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