As consumers return to spending, demand for long-distance freight will recover
Los Angeles, CA (PRWEB) October 15, 2013
During the recession, the Long-Distance Freight Trucking industry struggled through difficult operating conditions and weak demand. The decline in consumer spending drastically reduced the amount of freight that needed to be transported, causing industry revenue to fall 18.5% in 2009. Meanwhile, declines across the manufacturing sector and volatile crude oil prices further pressured the industry's financial performance during the five years to 2013. Due to rising diesel prices, operators have had to increase fuel surcharges to mitigate the prices' effects on profit and boost revenue. Despite these obstacles, the industry returned to growth in 2010. According to IBISWorld Indsutry Analyst Lauren Setar, “Revenue is expected to increase 1.3% during 2013, as a modest increase in disposable income boosts consumer spending and supports demand for long-distance freight transportation.” Because of the steep revenue decline in 2009, IBISWorld estimates that Long-Diatance Freight Trucking industry revenue will decrease at an annualized rate of 1.5% to $160.0 billion in the five years to 2013.
This industry has a low concentration, with owner-operators accounting for about 93.5% of all firms. Due to this fragmentation, intense price competition and low profit margins characterize the industry. “Because the industry has a large number of participants, companies are forced to offer competitive wages and benefits to draw in and retain the best employees,” says Setar. Therefore, IBISWorld expects that total wages will increase during the five years to 2013.
During the five years to 2018, IBISWorld projects that industry revenue will grow. However, the industry is not expected to surpass prerecession revenue levels until 2016; the majority of growth during the five-year period will be recovery. Trucking will continue to be the most widely used mode of freight transportation, but the industry will face increased competition from the Rail Transportation industry (IBISWorld report 48211) due to fluctuations in fuel prices and greater consumer concern regarding environmental sustainability.
For more information, visit IBISWorld’s Long-Distance Freight Trucking in the US industry report page.
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IBISWorld industry Report Key Topics
Long-distance freight trucking operators handle various commodities, generally palletized and transported in containers or van trailers. Establishments typically provide trucking between metropolitan areas that cross the borders of North American countries. The industry includes establishments operating as truckload or less-than-truckload carriers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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