Episode 45 Show Notes
Increased consumer spending not enough to end trucking bloodbath
An estimated 35,000 new trucking companies shut down in the 12 months ending Sept. 30
Rachel Premack·Thursday, November November 02, 2023
Ohio resident Matthew James Collins hauls frozen food around the Midwest — onion rings, ice cream and the like. On a recent October morning, Collins was trucking through a snowstorm in Minnesota.
He wasn’t carrying much. Collins recalled when he ran this route last year, he would regularly move 22 skids of frozen foods (a type of pallet) for four different corporate accounts. Now he’s moving just 12 skids for two clients.
The health of the trucking industry is typically a good gauge for how the U.S. economy at large is faring. That’s not the case right now. Economists remain stunned by how much stuff Americans are buying amid historic inflation and interest rate hikes. At the same time, the trucking industry is embroiled in a meltdown that’s slamming operators large and small.
“It doesn’t even seem like the broader economy even knows we’re in a recession,” said Steve Troyer, president of California Midwest Xpress, a 30-truck fleet. “But we’re in a good one.”
Americans are spending a larger chunk of their income on durable goods than they did before the pandemic, according to Goldman Sachs research. The U.S. economy saw “blockbuster” growth in the third quarter of 2023; it was the biggest surge in nearly two years, and attributed in part to increased consumer spending. Around 72.6% of the nation’s freight by weight is hauled by semi-truck. If Americans are buying so much, why aren’t truckers seeing a boon?
This trucking bloodbath is particularly gory
Trucking is a highly cyclical industry. During good times, manufacturers deliver more equipment to trucking fleets that want to expand and capture that surfeit of business and profits. Individuals open their own trucking fleets too.
The boom time typically lasts for under a year. Inevitably, so much capacity enters the industry and depresses rates again. Whatever trend outside of trucking that was spurring all of that new demand usually runs dry too. That means too many trucks and not enough freight to move.
The federal government tracks the number of trucking authorities created or shut down every month. Authorities are often put out of service after they fail to pay insurance premiums. In typical upcycles, a few hundred net trucking authorities are created, then a few hundred net trucking authorities are destroyed when the market flips less than a year later.
Tens of thousands of trucking companies were created during 2020 to 2022. The overwhelming majority were just one driver. (Source: FreightWaves SONAR)
The most recent freight upcycle quashed that pattern. The upcycle began around June 2020, when the federal government approved about 500 net trucking authorities. That reached a fever pitch in the summer of 2021, when around 2,000 net trucking authorities were created in a single month. It wasn’t until June 2022 when the cycle turned and net trucking authorities flipped back to negative.
The pandemic trucking boom lasted twice as long as a typical upswing. And each month created many times more trucking companies than a typical red-hot trucking month.
There’s still a massive excess of trucking authorities, according to federal data. In January 2020, there were around 255,000 authorities. Now there are around 363,000 authorities. Most of these businesses are small fleets with fewer than 10 drivers.
Tens of thousands of those new carriers have already shut down. According to a FreightWaves analysis of federal data, an estimated 35,000 new trucking companies shuttered in the fiscal year ending Sept. 30. For the 10 years before that, the average number of out-of-service orders was 15,585.
BELIEVE IT OR NOT
#1- MICROORGANISMS ON AND IN OUR BODY
Did you know we all have some sort of microbes on or in our bodies. They are so small and minute we wouldn’t even know they were there except for scientists exploring them. There’s good and bad ones for our bodies. But did you know they have discovered a new set of microbes that can release endorphins at will from our body. This is revolutionary for people that have no way of feeling the high of life without this process. They are injected into your fatty membrane between your toes. Sounds sorta odd, but it lets them release into your system from your feet straight up to your head. That euphoria feeling is almost like shooting up but totally legal and body repairing for all what ails you. Soon to be released as the FDA finishes its final tests and releases it. Release is set for around January 2024 if everything passes.
#2- TRUCKSTOPS PARKING DILEMA
A couple large chain truck stops are putting in more handicap spots and making all spots a pay to park. The thinking behind this is the large chains feel they are losing money on the back end supplying parking and not getting any sales from the items they sell from drivers using large grocery store chains to buy their supplies instead of the travel centers. So they’re trying to make up the revenue elsewhere. Buckle up drivers, they’re gonna fleece the drivers first before the public.
In 2020 the top 20 Biggest Trucking Companies in the US
Below, we have listed some of the biggest trucking companies in the US. Let us take a look at them.
Revenue: 2 billion USD (2020)
J.B. Hunt Transport Services Inc.
Revenue: 12.16 billion USD (2020)
Employees: 29,056 (2019)
Revenue: 1.183 billion USD (2020)
Employees: 29,000 (2019)
Revenue: 3.7 billion USD (2019)
Employees: 2000+ (2019)
Revenue: 97.3 billion USD (2021)
Employees: 543,000 (approximately)
Knight-Swift Transport Services
Revenue: 4.67 USD (2020)
Employees: 28,000+ (2020)
Estes Express Lines
Revenue: 3.6 billion USD (2020)
Employees: 20,000 (2022)
Revenue: 12.8 billion USD (2020)
Employees: 44,000 (2021)
Revenue: 4,552.8 million USD (2021)
Employees: 15,225 (2021)
Revenue: 3 billion USD (2020)
U.S Express Enterprises
Revenue: 1,742 million USD (2020)
Revenue: 4.0 billion USD (2021)
Employees: 13,000 (2022)
Ryder Supply Chain Solutions
Revenue: US$8.925 billion (2019)
Employees: 39,900 (2019)
Revenue: 20.6 billion USD (2021)
Employees: 850,000+ (approximately)
Roadrunner Transportation Systems
Revenue: $1,848 million USD (2019)
Revenue: 702.9 million USD (2021)
Employees: 12,784 (2022)
Revenue: 6.5 billion USD (2021)
Employees: 1320 (2021)
Revenue: 3.484 billion USD (2020)
Employees: 16,753 (2020)
Revenue: 4.015 billion USD (2020)
Employees: 21,000 (2020)
List of Truck Companies in USA
What’s surprising is that the list of truck companies in the USA doesn’t end here. Below, we have listed some more biggest trucking companies providing transportation and logistics solutions to their customers.
|27||Kenan Advantage Group||1997||9000|
|28||Universal Logistics Holdings||1932||6335|
|30||Southeastern Freight Lines||1950||8989|
|33||Anderson Trucking Service||1955||2143|
|35||Crete Carrier Corp.||1966||6000|
|38||Celadon Group Inc.||1985||5500|
|40||KLLM Transport Services||1963||–|
|41||Atlas World Group||1948||650|
|42||Covenant Transportation Group||1986||5500|
|43||Pitt Ohio Transportation Group||1978||5751|
|44||Central Transport International||N/A||–|
|46||Day and Ross||1950||3277|
|50||AAA Cooper Transportation||1955||5234|