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Mar.21, 2016

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34 THE JOURNAL OF COMMERCE www.joc.com MARCH 21.2016 TOP 25 TRUCKLOAD AND LTL CARRIERS SPECIAL REPORT TH E STRONG SU RG E in revenue U.S. less-than-truckload carriers enjoyed in 2014 ran out of gas last year, as weaker demand and lower f uel surcharges dragged down LTL trucking's top line. The combined revenue of the 25 larg- est LTL trucking companies declined 0.5 percent in 2015 to $32.1 billion, after shooting up 9.1 percent to $32.3 billion in 2014, according to The Journal of Com- merce's 2016 ranking of the Top 25 LTL Carriers, prepared by SJ Consulting Group. The 0.5 percent loss in revenue was the worst performance, and the first downturn, for the Top 25 LTL carriers since 2009, when their combined reve- nue plunged 24.3 percent in the wake of the recession and global fi nancial crisis. From 2010 through 2015, the Top 25 LTL carriers increased revenue on average 6 percent, expanding revenue fastest in 2011 at 12.4 percent. The sudden hard stop after five years of uneven revenue growth still leaves the Top 25 LTL carriers just short of the record revenue they reported in 2014, and shouldn't be seen as a calam- ity. Overall, the decline in revenue may have as much to do with falling fuel prices as lower industrial demand. Carrier margins improved overall in 2015, thanks to rate increases. But the revenue decline at 11 out of 25 of the largest LTL carriers should at least bring carriers, logistics partners and shippers to rethink pricing and ship- ping strategies as they roll into 2016. Total LTL industry revenue dropped 1 percent to $35.1 billion, after climbing 7.5 percent in 2014, according to SJ Con- sulting. (In its study, SJ Consulting ranks carriers by LTL revenue alone, including fuel surcharges but excluding revenue from non-LTL services such as truckload and third-party logistics.) The hundreds of smaller LTL carriers that didn't make the Top 25 list saw their combined revenue decline 6 percent, following a 6.6 percent drop in 2014. Those carriers have seen their share of the LTL pie diminish as their combined revenue dropped 16.8 percent over the past four years, from $3.6 billion in 2012 to less than $3 billion last year. That underscores a trend toward consolidation and concentration of rev- enue evident even before the recession. The biggest LTL and truckload carriers in the U.S. keep getting bigger. If those hundreds of smaller LTL and cartage companies were (hypothetically) con- solidated, their combined revenue would be slightly less than that of YRC Freight. At $32.1 billion, the combined revenue of the Top 25 LTL carriers is now 9.6 per- cent higher than their pre-recession record of $29.3 billion set in 2008. And the LTL industry as a whole has had more than $35 billion in revenue the past two years, a new record, SJ Consulting data show. The sudden deceleration in LTL truck- ing revenue last year refl ected an economic recovery that seemed to stumble over its own success. By the end of the year, eco- nomic growth skidded almost to a halt, with real GDP increasing only 1 percent

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