Local Freight Trucking in the US Industry Market Research Report From IBISWorld Has Been Updated

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During the recession, sluggish manufacturing production and slow retail spending reduced demand for freight transportation; however, industry conditions will improve as recovering consumer confidence and increased spending will support growth in freight volumes, boosting industry demand. For these reasons, industry research firm IBISWorld has updated a report on the Local Freight Trucking industry in its growing industry report collection.

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Rising demand and high fuel surcharges will help revenue grow, but profit may decline

Local freight trucking has struggled in the five years to 2013. During the economic downturn, slow manufacturing production and retail spending reduced demand and hurt industry revenue. “Declining demand caused greater price competition among operators, limiting profit,” says IBISWorld industry analyst Lauren Setar. “Additionally, high diesel costs dramatically reduced profitability in 2008, even though many industry operators implemented fuel surcharges.” These surcharges increased revenue but are not sustainable in the long term because customers will seek alternative modes of transportation.

The Local Freight Trucking industry performed miserably in 2009 when revenue plummeted 20.5%. “Weak operating conditions pushed operators into record losses in 2008 and 2009, forcing some companies out of the industry completely,” says Setar. Furthermore, a drastic reduction in diesel prices in 2009 caused revenue from fuel surcharges, which are tacked on when diesel prices are high, to decrease during the year. Consequently, revenue is estimated to fall at an average annual rate of 2.7% to $33.4 billion during the five years to 2013. In 2013, IBISWorld expects demand to recover and an increase in shipping volumes, which will cause industry revenue to increase slightly over the year.

Nonemployers comprise about 87.5% of companies in the Local Freight Trucking industry. Barriers to entry are low, allowing for many small operators to enter the industry and increase competition. These small operators were especially vulnerable to the decline in demand during the recession. As such, in the five years to 2013, the number of companies declined to 195,111 enterprises. Similarly, reduced demand has caused industry employment to fall during the same period.

Conditions are projected to improve slightly in the five years to 2018. As the economy continues to recover, including improvements in manufacturing and retail spending, the industry is expected to grow because a greater number of goods will require shipping. Additionally, diesel prices will cause growth as companies heighten fuel surcharges to offset costs, though profit will eventually diminish. For more information, visit IBISWorld’s Local Freight Trucking in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in this industry provide general freight trucking over short distances. General freight companies handle a variety of commodities, which are generally palletized and transported in a container or van trailer. Local general freight trucking companies usually provide trucking within a metropolitan area that may cross state lines, and the trips are generally same-day return.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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