Fleet Management News & Business Info | Commercial Carrier Journal
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54 commercial carrier journal | august 2017 Lackluster economic conditions in 2016 see truck counts shrink, revenues diminish among for-hire carriers, but some segments thrived BY JEFF CRISSEY T rucking faced a myriad of headwinds in 2016 that resulted in anemic growth in most segments of the industry. Chief among them was a nine-year high in retail inventory-to-sales ratios in the first quarter that led to weak demand throughout much of the freight network for the rest of the year. A contentious presidential election cycle further dampened optimism for business investments, and consumer spending was all but frozen until the election was over. Both the general freight and refrigerated segments of the 2017 CCJ Top 250 companies experienced stagnant finan- cial results in 2016. Of those companies in the rankings that self-reported revenues for both 2015 and 2016, general freight revenues rose only 0.3 percent, and refrigerated revenues were flat at 0.0 percent. Trucking companies serving the oil and gas and frack- ing markets also struggled with depressed market condi- tions through the first three quarters of 2016. According to companies in the flatbed/specialized/heavy haul and tank/ bulk commodities segments that self-reported revenues for both 2015 and 2016, revenues were down 1.7 percent and 7.7 percent, respectively. Those two segments were joined by the household goods segment, for which CCJ Top 250 companies reported a 5.2 percent decrease in revenue, as well as a 3.4 percent decrease in revenue for the motor vehicles segment despite a record year for car sales. But 2016 wasn't completely without merits. Carriers with competencies in last-mile and pickup-and-delivery services benefited from the growing e-commerce market. According to a report by the U.S. Department of Commerce, e-com- merce represented roughly $390 billion of U.S. retail sales in 2016, a 15-percent increase from the previous year. United Postal Service and FedEx (Nos. 1 & 2 in this year's CCJ Top 250) alone combined for a $5.31 billion increase in operating revenues in 2016 vs. 2015, and fellow Top 250 segment companies DHL Americas and Spee Dee Delivery Service experienced similar gains, albeit on a smaller scale. The significance of the continued rise in e-commerce and the health of the package segment to the rest of the segments in the CCJ Top 250 cannot be understated. If you remove the 7.2 per- cent increase in revenues of those four package companies from the CCJ Top 250, year-over-year revenue growth for companies across all segments that self-reported revenues in both 2015 and 2016 would fall from 4.1 percent to just 1.2 percent. On a power unit basis, CCJ Top 250 fleets also shed trucks during the last year. The total truck and tractor count for the companies in the 2017 CCJ Top 250 totals 659,886 power units, a 2.9 percent decrease from 2016. Car- riers in the flatbed/specialized/heavy haul segment account- ed for just over 31,000 power units, a 29.8 percent decrease from the 2016 rankings. Only the tank/bulk commodities (3.7 percent), packages/small shipments (6.6 percent) and intermodal (8.2 percent) segments showed year-over-year growth in truck and tractor counts. M&A activity slows in 2016 The industry saw relatively few mergers and acquisitions in 2016, but several certainly made an impact on this year's list. Schneider (No. 8) kicked things off in June with the ac- quisition of final-mile delivery specialist Watkins & Shepard (No. 133 in last year's CCJ Top 250), as well as Lodeso, a Editor's note: Due to an ongoing investigation into accounting discrepancies at two Roadrunner Transportation Services subsidiary companies dating back to 2015, RRTS has yet to file updated 10-K forms with the U.S. Securities and Exchange Commission. As a result, the company is absent in this year's CCJ Top 250 ranking.