SIC 4213 Trucking Except Local

 
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SIC 4213

This category covers establishments primarily engaged in furnishing "over-the-road" trucking services or storage services, including household goods either as common carriers or under special or individual contracts or agreements, for freight generally weighing more than 100 pounds. Such operations are principally outside a single municipality, outside one group of contiguous municipalities, or outside a single municipality and its suburban areas. Establishments primarily engaged in furnishing air courier services for individually addressed letters, parcels, and packages generally weighing less than 100 pounds are classified in SIC 4513: Air Courier Services and other courier services for individually addressed letters, parcels, and packages generally weighing less than 100 pounds are classified in SIC 4215: Courier Services Except Air.

NAICS CODE(S)

484121

General Freight Trucking, Long-Distance, Truckload

484122

General Freight Trucking, Long-Distance, Less than Truckload

484210

Used Household and Office Goods Moving

484230

Specialized Freight (except Used Goods) Trucking, Long-Distance

INDUSTRY SNAPSHOT

In the mid-2000s there were approximately 15.5 million trucks on U.S. roads, of which 1.9 million were tractor trailers. The transportation industry generated a gross operating profit in excess of $198 billion in 2004, and trucks accounted for approximately 67 percent of all freight by weight and nearly 75 percent by value. Although tens of thousands of companies were involved in the long-haul trucking industry in the mid-2000s, the 50 largest firms accounted for nearly half of all general freight revenues and about 30 percent of specialized freight revenues.

After suffering through financial difficulties during the early 2000s caused by a slow down in the economy, the trucking bounced back in the mid-2000s. With many trucking companies either going under or swallowed up by larger firms during the recession, when the economy recovered, the remaining companies were running near full capacity. After a robust 24 percent increase during 2004, operating profits were expected to increase by approximately 5 percent during 2005. Although also nervous about continuing high fuel prices, the trucking industry leaders were most hampered by a lack of drivers, which was limiting expansion efforts.

ORGANIZATION AND STRUCTURE

The non-local trucking industry is divided into several segments that are based on the size of freight shipments (truckload, less-than-truckload), the type of goods hauled (household goods, general freight), the size of the trucker's market (regional, national), and the nature of the availability of the trucker's services to shippers (common, contract, or private carriage). Thus, an industry firm can be categorized as a regional contract carrier who hauls less-than-truckload shipments of general freight or as a national common carrier who hauls truckload shipments of bulk goods, and so on. National carriers have the equipment, facilities, and operating authority to transport freight cross-country while regional carriers primarily serve smaller multistate geographical areas such as the southern states or the West Coast. Long-haul transport is defined as shipments of 200 to 1,000 miles or more, and short-haul transport refers to shipments of 50 to 700 miles, depending on the carrier and other variables. "Off-the-road" transport refers to primarily agricultural and construction-related trucking involving minimal use of public roads.

Less-than-Truckload

Less-than-Truckload (LTL) carriers haul shipments of 10,000 pounds or less in combined lots from more than one shipper. Although modern trucks can carry loads of 40,000 pounds or more, a "truck load" has traditionally been defined as 10,000 pounds. LTL carriers, then, are distinguished from truckload (TL) carriers not by the weight of individual trucks but by the number of individual shipments that comprise the truck's load. Unlike TL shipments, which typically involve the direct hauling of one shipper's freight from origin to destination, LTL shipments usually involve five phases: pick-up, sorting at a distribution terminal or transfer hub, line haul (the main, and longest, leg of the shipment), sorting at a destination facility, and final delivery. The LTL market is divided evenly between general freight carriers and carriers of small packages (shipments weighing less than 500 pounds). The deregulation of the trucking industry in 1980 resulted in a flood of new TL firms, but the prohibitive costs of entry limited the number of new carriers in the LTL segment. A national LTL carrier must be able to finance a large sales force, expensive technology, and approximately 500 distribution terminals.

Shorter routes and increased use of information technology had the greatest impact on the for-hire trucking segment of the industry. Shippers continued to streamline product manufacturing cycles and required just-in-time delivery schedules. This, in turn, placed greater demand for shorter, more reliable truck supply routes. For-hire trucking firms were also faced with growing competition from doublestack rail. It forced many of them to surrender a number of long-haul routes to the railroads. Acknowledging the trend, a growing number of trucker-railroad alliances were formed. Under these partnerships, truckers handled pick-up and delivery.

Truckload

TL carriers haul shipments of 10,000 pounds or more from origin to destination. In 1992, roughly one-quarter of the non-local trucking industry's general freight tonnage was hauled by about 40,000 direct origin-to-destination TL carriers. With an onslaught of mergers, in 1995 there were some 20,000 truckload providers in the country. The TL segment hauls about 80 percent of all intercity freight and includes for-hire and private carriers. Because TL firms do not need to maintain intermediate freight consolidation facilities, the TL segment has historically been characterized by comparatively low start-up costs. When deregulation removed restrictions on new businesses entering the trucking industry, the TL segment experienced fierce competition among a large number of new, poorly capitalized firms. About two-thirds of the trucking industry consisted of such new, often high-debt, low-income firms. The largest TL carriers had low profit margins, market shares of only 1 percent to 3 percent, and revenues that ranged between $30 million and $40 million (compared with the several billion dollar revenues of the largest LTL carriers).

Common Carriers

Common carriers are "for-hire" public truckers whose operating authority is conditioned on the availability of their services to any shipper who buys them. Historically, common carriers have been categorized according to the cargo they carry and the routes they cover: "regular" (or specific, limited routes) and "irregular" (unrestricted routes).

Contract Carriers

Contract carriers provide trucks, equipment, and services (such as fleet maintenance or customer billing) on an exclusive, guaranteed basis for shipping customers who prefer the convenience of leasing trucks to owning them. As dedicated contract carriers, truck leasing firms (such as Ryder Systems) may lease drivers in addition to trucks. Such firms may also provide fuel, safety training, insurance, maintenance and other services to their customers. Contract carriers are often common carriers with an additional operating authority that allows them to contract out their services and have historically transported TL shipments. The growth of just-in-time inventory management techniques, however, has created a niche for contract carriers to haul lighter LTL "time-sensitive" parts or materials from warehouse to plant for primarily large industrial firms.

For-hire

For-hire carriers offer their services either impartially to all shippers (common carrier authority) or exclusively for specific shippers (contract carrier authority). In 2004, distribution of goods by the non-local for-hire trucking segment represented nearly 47 percent of the total industry by weight and 60 percent by value of good shipped.

Private Carriers

The private carriage market consists primarily of manufacturers, builders, retailers, or other firms (such as Sears Roebuck and Wal-Mart Services) who own, lease, or control truck fleets for the exclusive transport of their own goods or products. Many older private trucking fleets were created as alternatives to the inflated shipping costs charged by truckers in the industry's preregulated, heavily unionized years. Private fleets were maintained by 33 percent of manufacturing firms, 55 percent of food processing companies, 65 percent of the wood and lumber industry, and 75 percent of the construction materials industry. Private carriage allows shippers to maintain greater control over scheduling and freight handling and to customize service for specialized equipment or products.

Types of Freight

Although the trucking industry hauled 67 percent of total U.S. freight tonnage in 1994, that tonnage represented nearly 75 percent of the total dollar value of U.S. freight, reflecting the dominance of the trucking industry in the transportation of high-value goods and commodities.

Traditionally, the types of freight...

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