Research

Transportation/Airfreight & Surface Transportation

Truckload

The truckload industry by Department of Transportation (DOT) definition is characterized by shipments of 10,000 pounds or more and is approximately $65 billion in size. Concentration within the industry is very fragmented with approximately 50,000 carriers, and labor tends to be predominately non-union. TL carriers transport trailer-load shipments bound for a single destination, and routes tend to be irregular with few terminals (used mainly for maintenance). There are several sub-categories including dry-van, flatbed, temperature-controlled, tanker, regional and expedited. Operations vary depending on length of haul, which falls into three service categories: long-haul (more than 1,000 miles), medium-haul (600-1,000 miles) and short-haul (less than 600 miles). Rates (a proxy for pricing) have not kept pace with inflation (CPI) over the last 15 years. Profitability is defined in terms of operating ratios (one minus operating margin) and tends to vary from 82% to 99%. Growth is usually a function of shipper-driven consolidation and conversion of private fleets.

Less-Than-Truckload

The less-than-truckload (LTL) industry provides transportation of partial-load shipments that go to one or more destinations or full trailer-load shipments going to multiple destinations. The LTL is a $39 billion industry and is comprised of two distinct segments, national LTL and regional LTL. The national LTL participants operate a "hub-and-spoke" network with an average length of haul of 1,200 to 1,400 miles. Growth is dependent on accelerated economic activity and competitor failures. The estimated size of the national LTL segment is $12 billion. The regional LTL segment is characterized by numerous carriers, typically non-union, that operate a modified hub-and-spoke network, with an average length of haul of 200 to 600 miles for most freight. Growth in this segment is dependent on consolidation within the marketplace, the shift toward more regionalized freight patterns by shippers, and general economic growth. The regional LTL segment is highly fragmented, with the top 20 participants accounting for roughly 50% of the estimated $27 billion market.

Logistics/Maritime

Logistics/Maritime is the function by which the owner of goods outsources various elements of the supply chain to a third party. The global supply chain services and solutions industry consists of air and ocean freight forwarding, contract logistics, domestic ground transportation, customs clearances, distribution, inbound logistics, warehousing and supply chain management. Among the factors impacting the industry are the outsourcing of supply chain activities, increased global trade and sourcing, increased demand for time-definite delivery of goods, and the need for advanced information technology systems.

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