MOTOR CARRIER INDUSTRY PROFILE: STRUCTURE, OPERATIONS, AND FINANCIAL PERFORMANCE OF MAJOR SEGMENTS PROJECT TITLE: MEASURING EXPOSURE IN THE DIVERSE MOTOR CARRIER INDUSTRY Thomas M. Corsi William C. Tanner Elliot Rabinovich The Supply Chain Management Center The Robert H. Smith School of Business University of Maryland College Park, MD 20742 May 2000 Prepared for the Federal Highway Administration Federal Motor Carrier Safety Administration U.S. Department of Transportation Washington, D.C. DTFH61-98-X-00006 I. INTRODUCTION This report is the result of a contract (Measuring Exposure in the Diverse Motor Carrier Industry) between the Federal Highway Administration and the Supply Chain Management Center of the Robert H. Smith School of Business. The report constitutes a profile of the motor-carrier industry and its significant operating segments. It includes information from financial reports filed by the carriers with the US Department of Transportation (DOT) for the calendar year 1997. Two major agencies, The Trucking Information Services of the American Trucking Associations and Transportation Technical Services, Inc., compiled the information that the motor carriers submit to the DOT and produced a computerized file with this information. Data from a total of 1,804 firms were obtained after combining information from these two source organizations and filtering outlying data in the sample. These firms represent the largest for-hire firms in the industry. It is recognized, however, that there are firms that do not report any data to the DOT. Furthermore, some of the data that is reported to the DOT has inaccuracies, necessitating its exclusion. Unfortunately, these limitations could not be overcome, but must be recognized when assessing the results included in this report. The report is divided into fourteen sections. The first section presents overview information on the structural, operating, and financial characteristics of the motor-carrier industry and its thirteen segments. This section is followed by a separate section for each of the 13 industry segments. II. INDUSTRY OVERVIEW This section is designed to provide an overview of the structure, operation, and financial performance of the industry based on segmentation by dominant carrier activity. Thirteen carrier activity segments are analyzed. These segments are: Refrigerated, Bulk Materials - Non Tank, Tank Carriers, Moving/Household Goods, Heavy Equipment, General Freight Truck-Load (subdivided into small, medium, and large-sized carriers), General Freight Less-Than-Truck-Load, and Other Specialized (subdivided into small, medium, and large-sized carriers). The first of the following three sections presents information regarding the number of firms that participated in each segment, the total revenues per segment, and the revenue concentration among the largest firms in each segment. The second section includes information on carrier operations. This information covers equipment ownership patterns, average vehicle loads, and average lengths of haul. Finally, the third section reports on average financial performance of carriers in each segment. The information in this section includes operating ratios, net profit margins, and returns on equity. 1. Industry Structure Overall, 1,804 firms are included in this analysis (Table 1). The majority of the firms are in the three size segments in the General Freight Truck Load segment (57.7%). The segments with the smallest number of firms are the Heavy Equipment and Building Materials segments (1.2% and 1.7%, respectively). These 1,804 firms reported total annual revenues of $66.02 Billion. Firms in the General Freight Truck-Load Large group reported $22 Billion in total annual revenues. This constitutes almost 33.3% of all the industry's annual revenues. In addition, firms in the General Freight Less-Than-Truck-Load reported $20.9 Billion in total annual revenues. This constitutes almost 31.7% of all the industry's annual revenues. As these numbers indicate, there is a significant concentration of industry revenues among these two segments. In contrast, the Heavy Equipment and Building Materials segment only account for $306 Million (0.46%) and $737 Million (1.1%). It is important to note that these two segments were also the segments with the fewest number of firms. The industry's annual revenue concentration for the largest firm in each of the segments averaged 9.14%. Furthermore, the industry's annual revenue concentration across the five largest firms in each of the segments averaged 29.3%. The industry segment with the highest one-firm revenue concentration level is the Building Material segment (39.1%). This segment is also the segment with the highest five-firm revenue concentration ratio in the industry (77.3%). In each of two additional segments, Moving/Household Goods and General Freight LTL, the five firm revenue concentration ratio stood at approximately 50%. Of the remaining segments, excluding the medium and small-sized sub segments of the General Freight Truckload and Other Specialized carrier segments, the five-firm concentration ratios range from 20.9 to 39.8% (Refrigerated, Bulk Materials - Non Tank, Tank Carriers, Heavy Equipment, General Freight Truckload-Large, and Other Specialized-Large). 2. Operations Table 1 includes information on equipment ownership patterns for each of the segments. Average truck ownership rates range from a high of 98% (Heavy Equipment) to a low of 48% (Building Materials). In 8 of the13 segments, average truck ownership rates are 70% or above. Average tractor ownership rates range from a high of 83% (Heavy Equipment) to a low of 47% (Refrigerated). Although there is evidence of variations of equipment ownership patterns among carriers, the data indicate that there is a tendency for the majority of equipment to be owned by the carriers. Low levels of equipment ownership frequently reflect a carrier's commitment to the use of owner operators under a leasing arrangement. Table 1 also includes information on average truckloads and lengths of haul. The segments with the highest average load are the Building Materials (18.7 Tons) and the Bulk Materials - Non Tank (17.5 Tons). The segments with the smallest average load are the Moving/Household Goods (5.96 Tons) and the General Freight LTL (10.60 Tons). These latter two segments carry freight with lower density and higher demands on volume. The Moving/Household Goods and the General Freight LTL segments also have high average lengths of haul (884 and 529 Miles, respectively). These averages are exceeded only by the Refrigerated carriers, who achieved an average length of haul of 927 Miles. In contrast, three segments, Bulk Materials - Non Tank, Tank Carriers, and Heavy Equipment, had average lengths of haul below 200 Miles. 3. Financial Performance Operating ratio, defined as the ratio of operating expenses to operating revenues, is a basic parameter used to evaluate carrier performance in their fundamental transportation operations. As Table 1 indicates, overall, across all industry segments, the average operating ratio is 96.37. Seven industry segments reported better operating performance than this average. These segments are: Tank Carriers (95.58), General Freight Truckload-Medium (95.86), General Freight Truckload Large (95.20), General Freight LTL (95.14), Bulk Materials - Non Tank (95.94), Other Specialized Carriers-Medium (95.95), and Other Specialized-Large (94.78). The industry segment with worst average operating performance was the Heavy Equipment Segment (100.17). Net profit margins, defined as the difference between firm revenues and expenses as a percentage of firm revenues, provide a comprehensive measure of firm profitability by incorporating all the revenues and expenses of the firm, including revenues and expenses from non-transportation activities. Many firms have insignificant non-transportation revenues and expenses. For these firms, Table 1 provides no additional information beyond the operating ratio. As Table 1 shows, the 13 segments have an average firm profit margin of 2.23%. Ten of these 13 segments reported profit margins above that average. The three segments with a below-average net profit margin are Refrigerated (2.19%), General Freight Truckload-Medium (1.87%), and Building Materials (0.97%). Overall, as the segments' data illustrate, carriers are on average, profitable firms. The final measure of firm performance is return on equity. This performance measures the level of returns to the investors of the firm. As Table 1 illustrates, on average, the return on equity ratio across the 13 segments is 20.58. The segment with the highest return on equity ratio was General Freight-LTL (34.94). Three segments (Refrigerated, Bulk Materials - Non Tank, and Building Materials) had the lowest average return on equity with a value of approximately 15%, respectively. These numbers suggest that firms in the industry are, on average, able to generate positive returns to their shareholders and investors. Table 1: Profile of Industry Segments: Structure, Operations, and Financial Performance Variable Refrigerated Tank Carriers Moving/Household Goods Heavy Equipment Number of Firms 126 123 96 22 Total Revenue $4,590,125,446 $3,661,449,825 $4,943,727,767 $305,945,584 Revenue Share of the Largest Firm $345,422,841 (7.5%) $262,135,130 (7.2%) $730,261,166 (14.8%) $28,692,593 (9.4%) Revenue Share of 5 Largest Firms $1,447,280,228 (31.5%) $1,035,785,681 (28.3%) $2,539,757,759 (51.4%) $111,917,000 (36.6%) Average Truck Ownership (%) 69 73 82 98 Average Tractor Ownership (%) 47 55 62 83 Average Load (Tons) 16.47 14.63 5.96 13.44 Average Length of Haul (Miles) 927 172 884 197 Operating Ratio (%) 96.95 95.58 96.51 100.17 Net Profit Margin (%) 2.19 2.73 3.26 3.98 Return on Equity (%) 15.27 24.77 19.02 20.37 Variable General Freight-Small General Freight-Medium-Sized General Freight-Large Number of Firms 341 348 351 Total Revenue $1,443,310,537 $2,866,092,039 $21,950,000,000 Revenue Share of the Largest Firm $6,087,446 (0.4%) $10,975,558 (0.4%) $1,351,007,445 (6.2%) Revenue Share of 5 Largest Firms $30,343,894 (2.1%) $54,549,060 (1.9%) $4,591,469,364 (20.9%) Average Truck Ownership (%) 73 67 69 Average Tractor Ownership (%) 60 54 54 Average Load (Tons) 14.43 14.09 13.83 Average Length of Haul (Miles) 464 476 577 Operating Ratio (%) 96.70 95.86 95.20 Net Profit Margin (%) 2.52 1.87 2.95 Return on Equity (%) 19.90 16.44 21.88 Variable General Freight-LTL Bulk Materials - Non Tank Building Materials Number of Firms 56 75 31 Total Revenue $20,870,000,000 $1,272,262,509 $737,258,651 Revenue Share of the Largest Firm $2,577,328,172 (12.3%) $113,334,545 (8.9%) $288,145,000 (39.1%) Revenue Share of 5 Largest Firms $10,215,970,040 (49%) $373,497,567 (29.4%) $569,425,220 (77.3%) Average Truck Ownership (%) 81 71 48 Average Tractor Ownership (%) 74 68 58 Average Load (Tons) 10.6 17.5 18.7 Average Length of Haul (Miles) 529 183.4 443.5 Operating Ratio (%) 95.14 95.94 97.15 Net Profit Margin (%) 2.75 3.26 0.97 Return on Equity (%) 34.94 15.05 15.21 Table 1 (continued): Profile of Industry Segments: Structure, Operations, and Financial Performance Variable Other Small-Sized Other Medium-Sized Other Large-Sized Number of Firms 76 82 77 Total Revenue $318,128,966 $638,069,008 $3,387,804,017 Revenue Share of the Largest Firm $5,593,547 (1.8%) $10,856,667 (1.7%) $309,880,265 (9.1%) Revenue Share of 5 Largest Firms $27,648,631 (8.7%) $52,635,790 (8.2%) $1,204,976,952 (35.6%) Average Truck Ownership (%) 83 87 60 Average Tractor Ownership (%) 62 56 52 Average Load (Tons) 13.80 13.92 11.48 Average Length of Haul (Miles) 344 251 330 Operating Ratio (%) 96.83 95.95 94.78 Net Profit Margin (%) 3.26 2.86 3.68 Return on Equity (%) 20.65 19.87 24.11 III. GENERAL FREIGHT - LTL CARRIERS Overview of Carriers General Freight includes non-specialized commodities hauled by truckers such as boxed, bagged, or containerized items suitable for haulage in covered trailers. A total of 56 firms in the industry segment of General Freight (Less-than-Truckload) carriers reported $20.9 Billion in annual revenues for 1997 (Table 2). The revenues for the five largest firms account for 49% of all the segment's revenues. The largest firm in the industry, Roadway Express, generated 12.3% of the segment's total revenue. Four of the five largest firms in the industry account for 39.2% of the segment's total assets and three of the five largest firms in this industry segment account for 35% of the total units in the segment's fleet (Table 6). One of the largest firms in this segment did not report total assets in 1997 and two did not report total number of units in their fleet. The information summarized above suggests that there is moderate concentration of the segment's total business among the segment's five largest carriers. However, three of the five largest firms experienced profit margins below the levels achieved by this segment's carriers on average (Table 7). Furthermore, four of the five largest carriers experienced returns on equity that were below the average achieved by all carriers in the segment. Overall, the average net profit margin for firms in the industry was 2.8%. In addition, the average return on equity was 34.9% (Table 3). The five firms with the highest return on equity ratios had an average of 148.6% (Table 5). This indicates that these firms were about 4 times more effective in returning value to their shareholders with respect to the average firm in the industry. Two firms, Quast Transfer and Dixie Trucking Co. had average returns on equity in excess of 270%. Furthermore, the five most profitable firms are more than 22 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the industry is $10.2 Billion (Table 6), while the total revenue of the 5 most profitable firms is $458.4 Million (Table 4). Thus, carriers in this industry segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this segment handled on average 2.76 Million shipments and 1.76 Million tons of freight and produced 1.54 Billion ton-miles on average. Their average load was 10.6 tons and their average length of haul was 529 miles (Tables 2 and 3). Among the five largest carriers, Roadway Express, generated approximately four and a half times the average tons carried by firms in the segment as well as more than six times the average ton-miles (Table 4). On average, carriers in this segment owned 81% of their trucks; 74% of their tractors; and 100% of their trailers (Table 2). Among the five largest carriers in this segment, three (Roadway Express, Yellow Freight System, and Consolidated Freightways) relied almost exclusively on company-owned equipment operated by company drivers. In contrast, Roadway Package System (although it did not report specific data) depends exclusively on owner-operators for its package delivery operation. (Table 6). Among the five most profitable firms in the segment, average tons and ton-miles for reporting firms are substantially below segment averages. This again confirms the finding that firm profitability and size are not strongly related in this segment. With respect to average length of haul, among the most profitable firms reporting, one, Oliver Trucking, had an average almost double the average for all firms in the segment. However, another of the five most profitable firms, Dixie Trucking Company, had an average length of haul of only 29 miles, substantially below the average for all firms in the segment. Thus, segment profitability does not appear to be related directly to average length of haul, firms with well above average and well below average haul lengths are included in the group of most profitable segment carriers (Table 4). Three of the five most profitable firms (Quast Transfer, Dixie Trucking Company, and New Penn Motor Express) depended almost exclusively on company drivers to handle their tractor operations. (Table 4). Only one of the most profitable companies, Oliver Transport, owned only a small portion of its tractors (12%). Thus, tractor ownership patterns does not appear to provide a strong explanation for profitability in this industry segment. There is much greater dispersion in tractor ownership strategies among the smallest carriers in this industry segment than there is among the most profitable and largest firms. Indeed, among the five smallest firms in the segment, tractor ownership ranges from a low of zero (Widener Motor Lines) to a high of 85% (New Day Motor Freight). Two firms (Lewis Truck Lines and Ace Trucking) achieved tractor ownership levels of 43% and 48%, respectively (Table 8). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this segment, the average operating ratio is 95.1 (Table 3). Among the five most profitable firms (Table 5), based on return on equity, operating ratio ranged from a low of 79.4% (New Penn Motor Express) to a high of 94.2% (Quast Transfer). Another carrier, Pitt-Ohio Express, achieved an operating ratio of 86.4%, indeed, a very low operating ratio for this type of carrier to achieve. Among the five largest carriers (Table 7), the largest, Roadway Express, had an operating ratio of 97.8. Among this group of carriers, the one with the lowest operating ratio (Con-Way Transportation Services) had a ratio of 88.6. Among the five smallest carriers (Table 9), three had operating ratios in excess of 100 and the firm with the lowest operating ratio still had a ratio of 97.8 percent. Clearly, neither the smallest nor the largest carriers in this industry segment had the best operating ratios. Table 2--General Freight (LTL) Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 56 $20,870,000,000 Units in Fleet 47 331,326 Assets 49 $8,442,554,280 Tons Carried 46 81,150,222 Ton-Miles 38 58,626,871,675 Shipments 46 126,543,679 Average Size of Load (Tons) 37 10.6 Length of Haul (Miles) 38 529 Average Revenue Per Mile 47 $3.61 Revenue Per Ton 45 $166.37 Revenue Per Ton-Mile 38 $0.48 Average % of Trucks Owned 47 81% % of Tractors Owned 47 74% % of Trailers Owned 47 100% Outside Vehicle Maintenance per Truck/Tractor 42 $2,371 Table 3--General Freight (LTL) Carriers' Average Financial Performance Operating Income $19,000,000 Net Income $11,000,000 Operating Ratio 95.14 Net Profit Margin 2.75% Return on Equity 34.94% Table 4--General Freight (LTL) Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Quast Transfer Winsted, MN $43,685,198 649 $13,901,438 267,382 N/A Dixie Trucking Co. Charlotte, NC $21,967,796 588 $6,454,047 29,806 8,633,626 Oliver Trucking Indianapolis, IN $50,704,000 669 $12,105,000 423,753 414,617,428 Pitt Ohio Express Pittsburgh, PA $138,693,770 N/A $44,375,218 N/A N/A New Penn Motor Express Lebanon, PA $203,298,681 2,266 $135,159,930 1,081,334 232,781,012 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Quast Transfer 471,055 N/A N/A $92.74 $2.42 $163.38 N/A Dixie Trucking Co. 250,789 N/A 29 $87.59 $2.52 $73.70 $2.54 Oliver Trucking 176,233 13.7 978 $287.71 $1.67 $119.65 $0.12 Pitt Ohio Express N/A N/A N/A N/A N/A N/A N/A New Penn Motor Express 1,931,946 7.9 215 $105.23 $6.87 $188.01 $0.87 Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Quast Transfer N/A 100% 100% $3,834 Dixie Trucking Co. 100% 91% 100% $1,277 Oliver Trucking 0% 12% 100% $7,058 Pitt Ohio Express N/A N/A N/A N/A New Penn Motor Express 100% 100% 100% $1,212 Table 5--General Freight (LTL) Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Quast Transfer $2,544,497 $1,013,557 94.18 2.32% 292.04% Dixie Trucking Co. $1,784,736 $1,009,786 91.88 4.60% 272.99% Oliver Trucking $3,379,000 $3,569,000 93.34 7.04% 66.35% Pitt Ohio Express $18,916,748 $17,507,894 86.36 12.62% 65.34% New Penn Motor Express $41,980,903 $25,225,338 79.35 12.41% 46.40% Table 6--General Freight (LTL) Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles (in millions) Roadway Express Akron, OH $2,577,328,172 51,440 $758,137,595 7,964,230 10,407 Yellow Freight System Overland Park, KS $2,509,537,231 36,931 $957,295,861 8,610,393 10,821 Consolidated Freightways Portland, OR $2,187,801,128 N/A $873,282,570 6,944,170 8,814 Roadway Package System Pittsburgh, PA $1,581,754,000 N/A N/A N/A N/A Con-Way Transportation Svcs. Portland, OR $1,359,549,513 27,670 $721,134,178 6,017,052 2,992 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Roadway Express 15,294,805 21.50 1,307 $168.51 $5.32 $323.61 $0.25 Yellow Freight System 14,840,108 19.54 1,257 $169.11 $4.53 $291.45 $0.23 Consolidated Freightways 12,668,499 20.73 1,269 $172.70 $5.15 $315.06 $0.25 Roadway Package System N/A N/A N/A N/A N/A N/A N/A Con-Way Transportation Svcs. 10,981,572 9.54 497 $123.80 $4.33 $225.95 $0.45 Table 6--General Freight (LTL) Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Roadway Express 100% 100% 100% $4,863 Yellow Freight System 100% 95% 100% $3,429 Consolidated Freightways 100% 89% 100% $1,269 Roadway Package System N/A N/A N/A N/A Con-Way Transportation Services N/A N/A N/A $497 Table 7--General Freight (LTL) Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Roadway Express $56,111,358 $34,516,254 97.82 1.34% 13.78% Yellow Freight System $76,415,477 $36,944,625 96.95 1.47% 8.85% Consolidated Freightways $50,836,624 $29,841,855 97.68 1.36% 15.58% Roadway Package System N/A N/A 89.50 N/A N/A Con-Way Transportation Svcs. $154,448,671 $71,874,104 88.64 5.29% 23.45% Table 8--General Freight (LTL) Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Lewis Truck Lines Fargo, ND $10,831,342 429 $3,636,072 65,167 16,833,043 Widener (Roy) Motor Lines Morristown, TN $13,663,361 455 $2,057,376 230,384 142,432,070 Brennan Trans. Svc. Burlington, NJ $15,015,958 486 $6,182,914 416,180 N/A Ace Trucking Jackson, TN $15,380,763 288 $4,586,963 N/A N/A Next Day Motor Freight St. Louis, MO $18,680,540 340 $7,442,772 105,832 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Lewis Truck Lines 115,515 3.7 258 $93.77 $2.36 $166.21 $0.64 Widener (Roy) Motor Lines 23,973 10.4 618 N/A $1.00 $59.31 $0.10 Brennan Trans. Svc. 115,590 N/A N/A $129.91 $2.45 $36.08 N/A Ace Trucking N/A N/A N/A N/A $0.98 N/A N/A Next Day Motor Freight 183,648 N/A N/A $101.72 $2.97 $176.51 N/A Table 8--General Freight (LTL) Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Lewis Truck Lines 100% 43% 100% $5,564 Widener (Roy) Motor Lines N/A 0% 100% N/A Brennan Trans. Svc. 82% 70% 100% $821 Ace Trucking N/A 48% 100% $393 Next Day Motor Freight 100% 85% 100% $2,904 Table 9--General Freight (LTL) Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Lewis Truck Lines -$293,695 -$361,236 102.71 -3.34% 18.82% Widener (Roy) Motor Lines -$553,442 -$740,025 104.05 -5.42% N/A Brennan Trans. Svc. $176,231 -$152,824 98.83 -1.02% -22.45% Ace Trucking -$123,707 -$70,030 100.80 -0.46% -12.07% Next Day Motor Freight $405,490 $326,350 97.83 1.75% 6.21% Summary Charts and Graphs for General Freight - LTL Carriers Summary Data for General Freight - LTL Carriers General Freight - LTL Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 57 11,000,000 2,600,000,000 370,000,000 600,000,000 Expenses 56 11,000,000 2,500,000,000 340,000,000 580,000,000 Operating Income 49 (2,247,360) 150,000,000 19,000,000 29,000,000 Net Income 49 (4,224,750) 71,874,104 11,000,000 15,000,000 Total Assets 49 2,057,376 1,500,000,000 170,000,000 300,000,000 Total Liabilities 49 1,805,561 680,000,000 91,000,000 160,000,000 Total Equity 49 (3,073,985) 1,100,000,000 81,000,000 180,000,000 Operating Ratio 56 79 109 95 5 Net Profit Margin 49 -9% 13% 3% 4% Return on Equity 49 -22% 292% 35% 62% Individual Expense Items Drivers and Helpers Wages 15 6,156,639 550,000,000 160,000,000 190,000,000 Insurance 49 4,089 61,786,791 8,978,771 15,000,000 Outside Vehicle Maintenance 49 - 46,014,640 4,242,370 8,876,739 Purchased Transportation 57 - 130,000,000 8,584,005 21,000,000 Fleet Composition (Items as a percent of total) Trucks Owned 47 0% 100% 81% 38% Trucks Leased 47 0% 100% 19% 38% Tractors Owned 47 0% 100% 74% 34% Tractors Leased 47 0% 100% 26% 34% Trailers Owned 47 100% 100% 100% 0% Trailers Leased 47 0% 0% 0% 0% Operating Statistics Total Units in Fleet 47 134 51,440 7,049 11,639 Total Highway Miles 48 4,593,280 550,000,000 92,000,000 130,000,000 Total Tons Carried 46 65,167 8,610,393 1,764,135 2,200,220 Total Ton-Miles 38 8,633,626 11,000,000,000 1,500,000,000 2,700,000,000 Total Shipments 46 23,973 15,000,000 2,750,950 3,936,616 Revenue per Mile 47 $0.98 $7.99 $3.61 $1.58 Revenue per Ton 45 $36.08 $359.60 $166.37 $75.32 Revenue per Shipment 44 $28.49 $287.71 $124.51 $51.14 Revenue per Ton-Mile 38 $0.10 $2.54 $0.48 $0.41 Average Load (Tons) 37 4 22 11 5 Average Haul (Miles) 38 29 1,551 529 402 Outside Vehicle Maintenance per Truck/Tractor 42 - 7,058 2,371 1,818 Valid N (listwise) 13 IV. GENERAL FREIGHT - SMALL CARRIERS Overview of Carriers A total of 1040 firms in the General Freight (Truckload) industry segment reported $26.26 Billion in annual revenues for 1997 (Table 10). Dividing this segment into three groups, based on total revenues, we find that the small-sized tier of the carriers generates $1.4 Billion in revenues. This subtotal accounts for 5.5% of the total revenues in the General Freight industry segment. The remainder of this section focuses on the small-sized General Freight firm tier. The revenues for the five largest firms in this sub segment account for 2.1% of the sub segment's total revenue. The largest firm in this sub segment, Howes & Howes, generated 0.4% of the segment's total revenue. The five largest firms in this industry sub segment account for 2.7% of the sub segment's total assets and 1.8% of the sub segment's total units in the fleet (Table 14). The information summarized above suggests that there is a low level of concentration in this industry segment. This high level of disaggregation is reflected in the negative net incomes reported by three of the five largest firms in the sub segment. Despite this, the average net income among the five largest firms in the sub segment is $182,685, resulting in an average net profit margin of 3% (Table 15). Three of the five smallest carriers in the sub segment reported positive net incomes (Table 17). This is a further indication that despite the high level of competition that firms can generate positive net incomes that might be caused by certain managerial practices. Overall, the average net profit margin for firms in this sub segment was 2.5%. In addition, the average return on equity was 19.9% (Table 11). The five firms with the highest return on equity ratios had an average of 308.1% (Table 13). This indicates that these firms were about 16 times more effective in returning value to their shareholders with respect to the average firm in this industry sub segment. These firms are 1.4 times smaller than the five largest firms in the sub segment. Indeed, the total revenue of the 5 largest firms in the sub segment is $30.3 Million (Table 14), while the total revenue of the 5 most profitable firms is $21.5 Million (Table 12). Thus, carriers in this industry sub segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this sub segment handled on average 25,360 shipments and 155,649 tons of freight and produced 13.3 Million ton-miles on average. Their average load was14.4 tons and 63 firms reported an average length of haul of 464 miles (Tables 10 and 11). Three of the five largest carriers in the sub segment reported information about the amount of tons produced. On average, these carriers generated 1.2 times the average number of tons carried in this industry sub segment (Table 12). On average, carriers in this sub segment owned 73% of their trucks; 60% of their tractors; and 74% of their trailers (Table 10). All of the five largest carriers in this sub segment reported tractor ownership information. Four of the five carriers owned a substantial portion of their tractors (between 68 and 88%). On the other hand, one carrier, G.&R.G, owned only 45% of its tractors (Table 14). Four of five most profitable firms in the sub segment reported information about their tractor ownership. One firm owned 100% of its tractors (B&H Freight Line), while the other three firms owned only between 10 and 17% of their tractors. This suggests a bipolar strategy with an emphasis either on company drivers or owner operators (Table 12). Furthermore, there is variation among four of the five smallest companies in the sub segment in their truck-tractor ownership patterns. Two of the firms in the sub segment reporting tractor ownership relied on their own company drivers (Table 16), while the other two firms relied exclusively on owner operators. Again, this suggests that small firms in this sub segment are pursuing a bipolar strategy in their truck-tractor ownership patterns. One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this sub segment, the average operating ratio is 96.7% (Table 11). Among the five most profitable firms in the sub segment (Table 13), based on return on equity, operating ratio ranged from a low of 62.7% (B&H Freight Line) to a high of 127% (Birdsall). On average, the five most profitable firms in the sub segment reported an operating ratio of 93.4%. Among the five largest carriers (Table 15), the largest, Howes & Howes, had an operating ratio of 76.4%, the lowest among all the largest firms in this sub segment. On average, the five largest firms in the sub segment reported an operating ratio of 90.6%. On the other hand, two of the four smallest carriers reporting operating ratios (Table 17) had operating ratios below 100. The other two firms had operating rations above 100. The firm with the lowest operating ratio, Recktenwald, had a ratio of 78.3 percent. On average, four of the five smallest firms in the sub segment reported an average operating ratio of 102.3%. Firms in the small-sized segment of the General-Freight Carrier industry seem to have poorer operating performance in comparison with the largest and the medium-sized firms in that segment. The operating ratios within the small-sized sub segment in the industry also appear to indicate that firm size is an important factor in achieving high operating performance. Table 10-- General Freight (Truckload) Small-Sized Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 341 $1,443,310,537 Units in Fleet 334 35,487 Assets 339 $639,066,835 Tons Carried 193 30,040,331 Ton-Miles 215 2,864,936,308 Shipments 207 5,249,632 Average Size of Load (Tons) 68 14.43 Length of Haul (Miles) 63 464 Average Revenue Per Mile 258 $1.75 Revenue Per Ton 159 $54.39 Revenue Per Ton-Mile 67 $0.23 Average % of Trucks Owned 116 73% % of Tractors Owned 307 60% % of Trailers Owned 313 74% Outside Vehicle Maintenance per Truck/Tractor 279 $5,447 Table 11-- General Freight (Truckload) Small-Sized Carriers' Average Financial Performance Operating Income $148,023 Net Income $158,282 Operating Ratio 96.70 Net Profit Margin 2.52% Return on Equity 19.90% Table 12-- General Freight (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles T.H. Transport Berne, MO $5,012,859 17 $609,380 51,875 N/A Birdsall Riviera Beach, FL $5,949,528 70 $51,327,779 546,744 N/A B & H Freight Line Harrisonville, MO $4,322,601 128 $776,735 N/A N/A K S & D Rentals Woodward, OK $2,555,003 N/A $1,024,830 N/A N/A Hydra Trucking Sacramento, CA $3,670,486 113 $1,391,903 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile T.H. Transport 2,500 N/A N/A $2,005.14 $1.16 $96.33 N/A Birdsall 36,400 N/A N/A $163.45 N/A $10.88 N/A B & H Freight Line 57,936 N/A N/A $74.61 $5.76 N/A N/A K S & D Rentals N/A N/A N/A N/A N/A N/A N/A Hydra Trucking N/A N/A N/A N/A N/A N/A N/A Table 12-- General Freight (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor T.H. Transport N/A 13% 0% $31,439 Birdsall N/A 10% N/A $948 B & H Freight Line N/A 100% 100% $2,946 K S & D Rentals N/A N/A N/A N/A Hydra Trucking N/A 17% 10% $54,174 Table 13-- General Freight (Truckload) Small-Sized Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity T.H. Transport $371,851 $982,730 92.58 19.60% 349.50% Birdsall -$1,611,011 $15,630,892 127.08 N/A 333.23% B & H Freight Line $1,609,876 $1,752,179 62.76 40.54% 321.42% K S & D Rentals $331,527 $270,106 87.02 10.57% 289.96% Hydra Trucking $95,482 $936,033 97.40 25.50% 246.22% Table 14-- General Freight (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Howes & Howes Trucking Mesick, MI $6,087,446 153 $2,354,176 N/A N/A United Express Service N. Dartmouth, MA $6,074,862 80 $2,461,442 N/A N/A East-West Motor Freight Selmer, TN $6,069,000 152 $6,185,000 79,000 94,245,000 G. & R.G. Odessa, TX $6,061,316 104 $3,519,622 250,657 63,709,760 Garner Transportation Milton, WA $6,051,270 157 $2,495,000 214,287 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Howes & Howes Trucking N/A N/A N/A N/A N/A N/A N/A United Express Service N/A N/A N/A N/A $1.73 N/A N/A East-West Motor Freight 3,000 22.50 1,200 $2,232.72 $1.45 $77.27 $0.06 G. & R.G. 11,487 9.55 254 $527.67 $0.91 $24.18 $0.10 Garner Transportation 8,050 N/A N/A $751.71 $1.38 $28.24 N/A Table 14-- General Freight (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Howes & Howes Trucking 100% 68% 98% N/A United Express Service N/A 69% 90% $9,920 East-West Motor Freight N/A 88% 100% $4,276 G. & R.G. N/A 45% 69% $1,446 Garner Transportation N/A 70% 85% $8,263 Table 15-- General Freight (Truckload) Small-Sized Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Howes & Howes Trucking $1,434,490 $963,089 76.44 15.82% 99.23% United Express Service $18,373 -$121,039 99.70 -1.99% -19.79% East-West Motor Freight $146,000 -$3,000 97.60 -0.05% -0.05% G. & R.G. $1,236,701 $214,248 79.60 3.53% 24.92% Garner Transportation $24,004 -$139,871 99.60 -2.31% -73.91% Table 16-- General Freight (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Recktenwald (Richard C.) Buffalo, NY $76,500 2 $415,769 N/A N/A Pam Oil Sioux Falls, SD $137,999 124 $32,736 68,041 N/A H&H Bulk Transport Indianapolis, IN $427,368 106 $2,397,978 N/A N/A Hawkey Transportation Redding, CA $466,512 51 $1,545,285 9,334 1,676,753 Beaver Express Service Woodward, OK $668,957 N/A $3,008,070 2,533 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Recktenwald (Richard C.) 125 N/A N/A $612.00 $3.06 N/A $612.00 Pam Oil 4,316 N/A N/A $31.97 $0.04 $2.03 $31.97 H&H Bulk Transport N/A N/A N/A N/A $0.13 N/A N/A Hawkey Transportation 383 24.37 179.64 $1,218.05 $6.78 $49.98 $1,218.05 Beaver Express Service 25,260 N/A N/A $26.48 $3.54 $264.10 $26.48 Table 16-- General Freight (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Recktenwald (Richard C.) N/A N/A 0% N/A Pam Oil 0% 0% 100% $6,979 H&H Bulk Transport 100% 0% 100% $285 Hawkey Transportation 100% 94% 0% $740 Beaver Express Service N/A N/A N/A N/A Table 17-- General Freight (Truckload) Small-Sized Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Recktenwald (Richard C.) $16,604 $134,453 78.30 N/A 48.46% Pam Oil -$4,547,661 -$4,547,661 N/A N/A N/A H&H Bulk Transport -$33,392 -$39,114 107.81 -9.15% -4.74% Hawkey Transportation $16,047 $16,824 96.56 3.61% 1.40% Beaver Express Service -$190,133 $2,911,973 128.42 N/A 116.75% Summary Charts and Graphs for General Freight - Small Carriers Summary Data for General Freight - Small Carriers General Small TL Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 341 1,631 6,087,446 4,232,582 1,256,952 Expenses 342 801 7,560,539 4,072,183 1,240,404 Operating Income 342 (4,547,661) 2,502,314 148,023 462,310 Net Income 342 (4,547,661) 15,630,892 158,282 925,234 Total Assets 339 (50,890) 51,327,779 1,885,153 3,694,119 Total Liabilities 338 (1,237,661) 46,636,989 1,101,209 2,684,054 Total Equity 337 (3,399,407) 33,428,492 7,896,679 2,027,486 Operating Ratio 338 58 158 97 10 Net Profit Margin 337 -43% 41% 3% 7% Return on Equity 329 -190% 350% 20% 59% Individual Expense Items Drivers and Helpers Wages 344 - 99,198,034 960,776 5,341,825 Insurance 324 4,915 561,000 169,808 93,004 Outside Vehicle Maintenance 289 - 1,126,000 164,687 161,736 Purchased Transportation 344 (224,861) 6,727,805 990,137 1,212,141 Fleet Composition (Items as a percent of total) Trucks Owned 116 0% 100% 73% 41% Trucks Leased 116 0% 100% 27% 41% Tractors Owned 307 0% 100% 60% 40% Tractors Leased 307 0% 100% 40% 40% Trailers Owned 313 0% 100% 74% 37% Trailers Leased 313 0% 100% 26% 37% Operating Statistics Total Units in Fleet 334 - 556 106 71 Total Highway Miles 291 - 6,878,925 2,709,334 1,631,989 Total Tons Carried 193 - 3,008,500 155,649 318,159 Total Ton-Miles 215 - 134,918,784 13,325,285 26,265,680 Total Shipments 207 - 875,500 25,361 75,062 Revenue per Mile 258 $0.04 $7.10 $1.75 $1.12 Revenue per Ton 159 $1.43 $323.46 $54.39 $51.39 Revenue per Shipment 193 $3.34 $3,039.15 $675.40 $633.61 Revenue per Ton-Mile 67 $0.03 $2.82 $0.23 $0.41 Average Load (Tons) 66 1 44 14 8 Average Haul (Miles) 63 13 1,600 464 379 Outside Vehicle Maintenance per Truck/Tractor 279 - 54,174 5,447 6,284 Valid N (listwise) 11 V. GENERAL FREIGHT - MEDIUM-SIZED CARRIERS Overview of Carriers A total of 1040 firms in the General Freight (Truckload) industry segment reported $26.26 Billion in annual revenues for 1997 (Table 18). Dividing this segment into three groups, based on total revenues, we find that the mid-sized tier of the carriers generates $2.9 Billion in revenues. This subtotal accounts for 10.9% of the total revenues in the General Freight industry segment. The remainder of this section focuses on the medium-sized General Freight firm tier. The revenues for the five largest firms in this sub segment account for 1.9% of the sub segment's total revenue. The largest firm in this sub segment, B&T Mail Service, generated 0.4% of the segment's total revenue. The five largest firms in this industry sub segment account for 1.9% of the sub segment's total assets and 2.5% of the total units in the segment's fleet (Table 22). The information summarized above suggests that there is a low level of concentration in this industry segment. In fact, across all firms in this sub segment, revenues varied from a minimum of $6.1 Million to $11 Million. Despite this high level of disaggregation, four of the five largest firms in the sub segment reported positive net incomes. The average net income among these four firms is $177,535, resulting in an average net profit margin of 1.6% (Table 23). In addition, four of the five smallest carriers in the sub segment reported positive net profit margins. The highest profit margin among the five smallest firms in the sub segment was 7.6% (Table 25). Overall, the average net profit margin for firms in this sub segment was 1.9%. In addition, the average return on equity was 16.4% (Table 19). The five firms with the highest return on equity ratios had an average of 118.2% (Table 21). This indicates that these firms were about 7 times more effective in returning value to their shareholders with respect to the average firm in this industry sub segment. These firms are 1.3 times smaller than the five largest firms in the sub segment. Indeed, the total revenue of the 5 largest firms in the sub segment is $54.5 Million (Table 22), while the total revenue of the 5 most profitable firms is $40.4 Million (Table 20). Thus, carriers in this industry sub segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this sub segment handled on average 25,415 shipments and 244,000 tons of freight and produced 31.6 Million ton-miles on average. Their average load was 14.1 tons and 87 firms reported an average length of haul of 476 miles (Tables 18 and 19). Among the five largest carriers in the sub segment, B&T Mail Service, generated approximately two times the average tons carried by firms in the sub segment but only 63% of the average ton-miles (Table 20) as a consequence of the firm's short average length of haul (38 miles). On average, carriers in this sub segment owned 67% of their trucks; 54% of their tractors; and 67% of their trailers (Table 18). All of the five largest carriers in this sub segment reported tractor ownership information. One carrier, Circle City Transport, owned 100% of its tractors, while another carrier, T.B.&P., owned none of its tractors (Table 22). The other three firms owned between 55 and 80% of their tractors. The five most profitable firms in the sub segment varied widely in their tractor ownership patterns. One firm owned 100% of its tractors (Mount Vernon Mills), while the other four firms owned between 30 and 93% of their tractors. This suggests that a wide variety of tractor ownership strategies are being employed successfully in this sub segment. (Table 20). Furthermore, there is variation among the five smallest companies in the sub segment in their truck-tractor ownership patterns. Two of the five smallest firms in the sub segment reporting tractor ownership relied on their own company drivers (Table 24). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this sub segment, the average operating ratio is 95.9% (Table 19). Among the five most profitable firms in the sub segment (Table 21), based on return on equity, operating ratio ranged from a low of 83% (First-Class Service) to a high of 93% (WNK Express). Among the five largest carriers (Table 23), the largest, B&T Mail Services, had an operating ratio of 97.3%. Among this group of carriers, the one with the lowest operating ratio (Circle City Transport) had a ratio of 92.9%. Four of the five smallest carriers (Table 25) had operating ratios below 100% and the firm with the lowest operating ratio had a ratio of 86.1% (Super Van Service Company). Clearly, firms in the mid-sized segment of the General-Freight Carrier industry had poorer operating performance in comparison with the largest firms in that segment. Table 18-General Freight (Truckload) Medium Sized Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 348 $2,866,092,039 Units in Fleet 337 62,017 Assets 344 $1,146,514,554 Tons Carried 216 52,705,456 Ton-Miles 248 7,828,047,072 Shipments 236 5,998,033 Average Size of Load (Tons) 92 14.09 Length of Haul (Miles) 87 476 Average Revenue Per Mile 293 $2.22 Revenue Per Ton 186 $61.32 Revenue Per Ton-Mile 93 $716.44 Average % of Trucks Owned 122 67% % of Tractors Owned 311 54% % of Trailers Owned 322 67% Outside Vehicle Maintenance per Truck/Tractor 299 $5,760 Table 19-General Freight (Truckload) Medium-Sized Carriers' Average Financial Performance Operating Income $353,754 Net Income $181,323 Operating Ratio 95.86 Net Profit Margin 1.87% Return on Equity 16.44% Table 20-General Freight (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles W&K Express River Grove, IL $7,430,835 129 $1,338,070 N/A 9,143,456 Mount Vernon Mills Ware Shoals, SC $6,273,880 154 $1,437,918 N/A N/A Five Star Trucking Willoughby, OH $8,721,235 102 $2,587,262 166,000 N/A First Class Services Lewisport, KY $8,693,109 155 $3,492,717 674,035 N/A Hoffman Transport Hagerstown, MD $9,298,941 177 $5,221,578 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile W&K Express N/A N/A N/A N/A N/A N/A $0.87 Mount Vernon Mills N/A N/A N/A N/A N/A N/A N/A Five Star Trucking 4,150 N/A N/A $2,101.50 $2.08 $52.54 N/A First Class Services 30,638 N/A N/A $283.74 $2.08 $12.90 N/A Hoffman Transport 9,069 N/A N/A $1,025.35 $1.09 N/A N/A Table 20-General Freight (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor W&K Express N/A 30% 38% $3,085 Mount Vernon Mills 100% 100% 100% $1,103 Five Star Trucking 0% 52% 95% $1,184 First Class Services N/A 88% 95% $24,169 Hoffman Transport N/A 93% 66% $13,503 Table 21-General Freight (Truckload) Medium-Sized Carriers' Average Financial Performance: Five Most Profitable Firms Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity W&K Express $541,827 $217,625 93.20 2.73% 151.92% Mount Vernon Mills $782,186 $469,312 87.53 7.48% 117.60% Five Star Trucking $732,462 $616,648 91.60 7.07% 107.75% First Class Services $1,475,201 $1,017,889 83.03 11.71% 107.33% Hoffman Transport $960,936 $600,218 89.67 6.45% 106.45% Table 22-General Freight (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles B & T Mail Service New Berlin, WI $10,975,558 244 $1,642,202 527,440 19,921,409 Celebrity Freight Systems Paducah, KY $10,959,204 363 $3,754,741 N/A N/A T. B. & P. Express Daleville, IN $10,893,533 199 $1,939,073 115,437 171,430,172 L & H Trucking Co. Hanover, PA $10,864,041 520 $4,016,930 447,534 N/A Circle City Transport Dothan, AL $10,856,724 229 $10,721,887 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile B & T Mail Service 26,372 2.33 38 $416.18 $1.28 $20.81 $0.55 Celebrity Freight Systems N/A N/A N/A N/A $1.09 N/A N/A T. B. & P. Express 6,548 17.25 1,485 $1,663.64 $1.10 $94.37 $0.06 L & H Trucking Co 24,863 N/A N/A $436.96 $1.61 $24.28 N/A Circle City Transport 7,762 N/A N/A $1,398.70 $1.10 N/A N/A Table 22-General Freight (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor B & T Mail Service 100% 55% 88% $1,080 Celebrity Freight Systems N/A 80% 0% $6,354 T. B. & P. Express 0% 0% 0% $345 L & H Trucking Co. 100% 58% 54% $1,429 Circle City Transport N/A 100% 100% $2,056 Table 23-General Freight (Truckload) Medium-Sized Carriers' Average Financial Performance: Five Largest Firms Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity B & T Mail Service $295,919 $243,166 97.30 2.22% 34.76% Celebrity Freight Systems $299,323 -$42,597 97.27 -0.39% -14.95% T. B. & P. Express $355,755 $156,136 96.73 1.43% 34.35% L & H Trucking Co. $99,709 $63,109 99.08 0.58% 5.53% Circle City Transport $769,141 $247,730 92.92 2.28% 20.34% Table 24-General Freight (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles B & K Transportation Oak Creek, WI $6,121,789 195 $3,744,046 46,783 N/A Richers Trucking Wever, IA $6,132,762 68 $1,881,993 N/A N/A Martin Trucking Hugoton, KS $6,133,096 102 $1,814,776 364,438 N/A Super Van Service Co. St. Louis, MO $6,144,612 86 $1,897,156 41,639 13,532,536 Kindsvater Dodge City, KS $6,152,731 120 $3,346,150 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile B & K Transportation 5,057 N/A N/A $1,210.56 $1.78 $130.85 N/A Richers Trucking 2,688 N/A N/A $2,281.53 $1.15 N/A N/A Martin Trucking 14,874 N/A N/A $412.34 $1.46 $16.83 N/A Super Van Service Co. 63,476 8.29 325 $96.80 $3.76 $147.57 $0.45 Kindsvater N/A N/A N/A N/A $1.39 N/A N/A Table 24-General Freight (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor B & K Transpor-tation N/A 100% 100% $7,757 Richers Trucking N/A 100% 100% $12,578 Martin Trucking N/A 39% 89% $7,168 Super Van Service Co. 0% 14% 100% $2,955 Kindsvater 100% N/A 100% $26,038 Table 25-General Freight (Truckload) Medium-Sized Carriers' Average Financial Performance: Five Smallest Firms Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity B & K Transpor-tation $401,834 $277,435 93.44 4.53% 11.14% Richers Trucking $299,119 $59,263 95.12 0.97% 18.44% Martin Trucking $128,718 $105,548 97.90 1.72% 8.60% Super Van Service Co. $854,242 $468,851 86.10 7.63% 72.92% Kindsvater -$40,973 -$90,231 100.67 -1.47% -17.79% Summary Charts and Graphs for General Freight - Medium-Sized Carriers Summary Data for General Freight - Medium-Sized Carriers General Mid Size TL Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 348 6,121,789 10,975,558 8,236,897 1,386,327 Expenses 348 4,156,939 10,834,950 7,882,149 1,436,008 Operating Income 348 (1,877,074) 5,415,038 353,754 579,969 Net Income 348 (1,624,135) 7,384,000 181,323 515,770 Total Assets 344 138,536 69,080,444 3,332,891 5,200,228 Total Liabilities 344 (1,011,359) 61,319,409 2,057,747 3,659,634 Total Equity 344 (3,191,282) 46,433,393 12,755,147 2,895,507 Operating Ratio 347 58 126 96 6 Net Profit Margin 346 -26% 21% 2% 4% Return on Equity 324 -123% 152% 16% 34% Individual Expense Items Drivers and Helpers Wages 341 - 17,770,773 1,345,258 1,390,076 Insurance 335 (206,121) 935,886 264,821 145,022 Outside Vehicle Maintenance 311 (93,089) 2,176,690 287,608 275,084 Purchased Transportation 341 - 8,859,000 2,022,112 2,015,249 Fleet Composition (Items as a percent of total) Trucks Owned 122 0% 100% 67% 45% Trucks Leased 122 0% 100% 33% 45% Tractors Owned 311 0% 100% 54% 40% Tractors Leased 311 0% 100% 46% 40% Trailers Owned 322 0% 100% 67% 39% Trailers Leased 322 0% 100% 33% 39% Operating Statistics Total Units in Fleet 337 - 725 184 105 Total Highway Miles 322 - 11,200,000 4,997,208 2,812,144 Total Tons Carried 216 - 2,772,052 244,007 298,930 Total Ton-Miles 248 - 243,197,577 31,564,706 52,390,667 Total Shipments 236 - 614,400 25,415 48,368 Revenue per Mile 293 $0.81 $21.38 $2.22 $2.50 Revenue per Ton 186 $3.33 $345.50 $61.32 $60.71 Revenue per Shipment 223 $16.71 $3,296.38 $716.44 $580.87 Revenue per Ton-Mile 93 $0.03 $2.12 $0.23 $0.36 Average Load (Tons) 92 1 28 14 62,823 Average Haul (Miles) 87 6 2,440 476 483 Outside Vehicle Maintenance per Truck/Tractor 299 (1,501) 70,089 5,760 6,745 Valid N (listwise) 17 VI. GENERAL FREIGHT - LARGE CARRIERS Overview of Carriers A total of 1040 firms in the General Freight (Truckload) industry segment reported $26.26 Billion in annual revenues for 1997 (Table 26). Dividing this segment into three groups, based on total revenues, we find that the largest third of the carriers generates $21.95 Billion in revenues. This subtotal accounts for 83.6% of the total revenues in the General Freight industry segment. The remainder of this section focuses on the largest General Freight firm tier. The revenues for the five largest firms in this sub segment account for 20.9% of the sub segment's total revenue. The largest firm in this sub segment, JB Hunt Transport, generated 6.2% of the segment's total revenue. Three of the five largest firms in this industry sub segment account for 27.3% of the sub segment's total assets and 21.9% of the total units in the segment's fleet (Table 30). The information summarized above suggests that there is a low level of dominance by the largest carriers in this industry sub segment. However, two of the five largest firms experienced positive profit margins with the largest of the two firms having a net income gain of $48.4 Million, resulting in a net profit margin of 6.3% (Table 31). In addition, all of the five smallest carriers in the sub segment reported positive net profit margins. The highest profit margin among the five smallest firms in the sub segment was 14.2% (Table 33). Overall, the average net profit margin for firms in this sub segment was 3%. In addition, the average return on equity was 21.9% (Table 27). The five firms with the highest return on equity ratios had an average of 199.5% (Table 29). This indicates that these firms were about 9 times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are almost 20 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the sub segment is $4.59 Billion (Table 30), while the total revenue of the 5 most profitable firms is $233 Million (Table 28). Thus, carriers in this industry sub segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this sub segment handled on average 41,116 shipments and 3.9 Million tons of freight and produced 351.4 Million ton-miles on average. The average load was 13.8 tons and 124 firms reported an average length of haul of 577 miles (Tables 26 and 27). Among the five largest carriers, JB Hunt Transport, generated approximately five times the average tons carried by firms in the sub segment as well as 52 times the average ton-miles (Table 28). On average, carriers in this sub segment owned 69% of their trucks; 54% of their tractors; and 91% of their trailers (Table 26). Only two of the five largest carriers in this sub segment reported tractor ownership information. One carrier, JB Hunt Transport, owned 100% of its tractors, while the other carrier, Ryder Integrated Logistics, owned none of its tractors (Table 30). The five most profitable firms in the sub segment varied widely in their tractor ownership patterns. Three of them (PBX, Trailwood Transportation, and Ace Transportation) relied almost exclusively on owner-operators. On the other hand, two companies (Store-Wide Delivery and Consolidated Cargo Carrier) owned a significant share of their tractors. This suggests that neither an all owner-operator or an all company driver strategy is a key factor in devising a profitable business approach (Table 28). Furthermore, there is variation among the five smallest companies in the sub segment in their reliance on company drivers and owner-operators, although only four of the five smallest firms in the sub segment reported tractor ownership information. Among these four firms, only one (Budway Enterprises) relied exclusively on company drivers. The other three carriers in the group relied on company drivers to operate between 56 and 88% of their tractors (Table 32). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this sub segment, the average operating ratio is 95.2% (Table 27). Among the five most profitable firms in the sub segment (Table 29), based on return on equity, operating ratio ranged from a low of 87.6% (Store-Wide Delivery) to a high of 96.8% (Trailwood Transportation.) Among the five largest carriers (Table 31), the largest, JB Hunt Transport, had an operating ratio of 97.3%. Among this group of carriers, the one with the lowest operating ratio (Swift Transportation) had a ratio of 89.6%. Among the five smallest carriers (Table 33), all had operating ratios below 100% and the firm with the lowest operating ratio had a ratio of 90.1%. Clearly, firms in this sub segment of general-freight carriers had a strong operating performance regardless of their operating size. Table 26-- General Freight (Truckload) Large Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 351 $21,950,000,000 Units in Fleet 321 309,320 Assets 324 $7,587,506,076 Tons Carried 277 1,076,739,835 Ton-Miles 281 98,732,277,145 Shipments 278 11,430,294 Average Size of Load (Tons) 144 13.83 Length of Haul (Miles) 124 577 Average Revenue Per Mile 274 $1.54 Revenue Per Ton 177 $57.54 Revenue Per Ton-Mile 177 $0.37 Average % of Trucks Owned 99 69% % of Tractors Owned 283 54% % of Trailers Owned 281 91% Outside Vehicle Maintenance per Truck/Tractor 298 $3,463 Table 27-- General Freight (Truckload) Large Carriers' Average Financial Performance Operating Income $2,205,977 Net Income $1,141,330 Operating Ratio 95.20 Net Profit Margin 2.95% Return on Equity 21.88% Table 28-- General Freight (Truckload) Large Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles PBX Dakota City, NE $63,200,600 719 $9,494,496 1,629,136 1,465,965,483 Store-Wide Delivery Secaucus, NJ $12,474,113 99 $3,204,726 N/A N/A Trailwood Transportation St. Paul, MN $15,107,374 314 $610,487 N/A N/A Consolidated Cargo Carrier Columbia, SC $18,878,219 178 $2,124,992 N/A N/A Ace Transportation Lafayette, LA $123,311,993 1,899 $24,986,811 3,402,120 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile PBX 75,514 N/A 900 $836.94 $1.37 $38.79 $0.04 Store-Wide Delivery N/A N/A N/A N/A $3.31 N/A N/A Trailwood Transportation N/A N/A N/A N/A $1.57 N/A N/A Consolidated Cargo Carrier N/A N/A N/A N/A N/A N/A N/A Ace Transportation 340,223 N/A N/A $366.44 $1.29 $36.25 N/A Table 28-- General Freight (Truckload) Large Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor PBX N/A 0% 100% $691 Store-Wide Delivery N/A 100% 100% $1,526 Trailwood Transportation N/A 4% 0% $7,610 Consolidated Cargo Carrier N/A 28% 100% $3,619 Ace Transportation 0% 0% N/A $70 Table 29-- General Freight (Truckload) Large Carriers' Average Financial Performance: Five Most Profitable Firms Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity PBX $7,236,020 $10,172,625 88.55 16.10% 286.16% Store-Wide Delivery $1,551,622 $1,659,259 87.56 13.30% 224.38% Trailwood Transportation $486,662 $467,080 96.78 3.09% 177.11% Consolidated Cargo Carrier $1,573,284 $933,945 91.67 4.95% 156.94% Ace Transportation $11,184,110 $11,184,110 90.93 9.07% 152.97% Table 30-- General Freight (Truckload) Large Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets (in thousands) Tons carried Ton-miles (in thousands) Hunt (J.B.) Transport Lowell, AR $1,351,007,445 33,404 $1,020,011 19,506,864 18,302,184 Ryder Integrated Logistics Miami, FL $1,298,407,390 14,205 $380,091 11,401,852 N/A Werner Enterprises Omaha, NE $772,094,529 20,050 $667,637 N/A 7,447,910 Swift Transportation Phoenix, AZ $713,638,000 N/A N/A N/A N/A Landstar Ranger Jacksonville,FL $456,322,000 N/A N/A N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Hunt (J.B.) Transport 1,500,528 23.55 938 $900.35 $1.74 $69.26 $0.07 Ryder Integrated Logistics N/A N/A N/A N/A $3.63 $113.88 N/A Werner Enterprises N/A 11.65 N/A N/A $1.21 N/A $0.10 Swift Transportation N/A N/A N/A N/A N/A N/A N/A Landstar Ranger N/A N/A N/A N/A N/A N/A N/A Table 30-- General Freight (Truckload) Large Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Hunt (J.B.) Transport N/A 100% 100% $3,447 Ryder Integrated Logistics 0% 0% 100% $495 Werner Enterprises 84% N/A 100% $1,171 Swift Transportation N/A N/A N/A N/A Landstar Ranger N/A N/A N/A N/A Table 31-- General Freight (Truckload) Large Carriers' Average Financial Performance: Five Largest Firms Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Hunt (J.B.) Transport $36,333,310 -$18,361,292 97.31 -1.36% -13.91% Ryder Integrated Logistics $31,325,080 $17,324,750 97.59 1.33% 20.68% Werner Enterprises $77,647,130 $48,377,802 89.94 6.27% 12.24% Swift Transportation N/A N/A 89.60 N/A N/A Landstar Ranger N/A N/A 95.60 N/A N/A Table 32-- General Freight (Truckload) Large Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Bonded Carriers Martinsburg, WV $11,006,513 292 $3,743,439 243,000,000 N/A Jonsen (D.E.) Grove City, OH $11,028,356 281 $5,240,490 N/A N/A Klink Trucking Ashley, IN $11,030,758 N/A $10,079,494 N/A N/A Gateway Transfer Co. Laredo, TX $11,031,891 174 $7,559,333 64,000 N/A Budway Enterprises Pico Revera, CA $11,039,069 151 $4,962,369 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Bonded Carriers 16,500 N/A N/A $667.06 $1.36 N/A N/A Jonsen (D.E.) N/A N/A N/A N/A $1.09 N/A N/A Klink Trucking N/A N/A N/A N/A N/A N/A N/A Gateway Transfer Co. 3,200 N/A N/A N/A $3.47 $172.37 N/A Budway Enterprises N/A N/A N/A N/A N/A N/A N/A Table 32-- General Freight (Truckload) Large Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Bonded Carriers 100% 88% 100% N/A Jonsen (D.E.) N/A 61% 7% $2,301 Klink Trucking N/A N/A N/A N/A Gateway Transfer Co. 100% 56% 100% $301 Budway Enterprises N/A 100% 100% $5,683 Table 33-- General Freight (Truckload) Large Carriers Average Financial Performance: Five Smallest Firms Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Bonded Carriers $429,927 $1,559,160 96.09 14.17% 108.77% Jonsen (D.E.) $738,441 $202,476 93.30 1.84% 29.10% Klink Trucking $187,413 $187,413 98.30 1.70% 6.17% Gateway Transfer Co. $1,097,772 $905,549 90.05 8.21% 12.17% Budway Enterprises $549,658 $237,688 95.02 2.15% 19.06% Summary Data for General Freight - Large Carriers General Large TL Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 351 11,006,513 2,512,100,000 62,545,658 182,592,387 Expenses 351 - 1,314,674,135 51,774,549 121,369,531 Operating Income 326 (35,043,937) 77,647,130 2,205,977 6,518,995 Net Income 326 (50,511,831) 48,377,802 1,141,330 5,086,376 Total Assets 324 535,721 1,020,011,700 23,418,229 75,496,812 Total Liabilities 324 (7,176,512) 887,984,442 15,197,181 57,839,724 Total Equity 324 (43,533,129) 395,117,507 8,212,843 27,076,914 Operating Ratio 347 70 112 95 5 Net Profit Margin 325 -18% 25% 3% 4% Return on Equity 309 -68% 286% 22% 35% Individual Expense Items Drivers and Helpers Wages 253 - 63,274,000 1,266,408 4,278,934 Insurance 323 (176,931) 37,506,499 1,454,780 3,455,024 Outside Vehicle Maintenance 210 (177,805) 24,793,632 644,282 1,796,920 Purchased Transportation 253 - 291,711,462 9,427,252 26,032,658 Fleet Composition (Items as a percent of total) Trucks Owned 99 0% 100% 69% 42% Trucks Leased 99 0% 100% 31% 42% Tractors Owned 283 0% 100% 54% 40% Tractors Leased 283 0% 100% 46% 40% Trailers Owned 281 0% 100% 91% 24% Trailers Leased 281 0% 100% 9% 24% Operating Statistics Total Units in Fleet 321 - 33,404 964 2,548 Total Highway Miles 310 - 777,034,411 31,163,998 71,708,872 Total Tons Carried 277 - 624,000,000 3,887,147 40,159,652 Total Ton-Miles 281 - 18,302,184,862 351,360,417 1,318,625,197 Total Shipments 278 - 1,500,528 41,116 107,902 Revenue per Mile 274 $0.72 $6.23 $1.54 $0.76 Revenue per Ton 177 $1.62 $225.82 $57.54 $42.78 Revenue per Shipment 155 $31.13 $2,568.63 $746.95 $488.87 Revenue per Ton-Mile 177 $0.00 $35.41 $0.37 $2.67 Average Load (Tons) 144 1 28 14 6 Average Haul (Miles) 124 9 2,542 577 441 Outside Vehicle Maintenance per Truck/Tractor 298 (1,218) 108,126 3,463 7,906 Valid N (listwise) 8 VII. MOVING/HOUSEHOLD GOODS CARRIERS Overview of Carriers The Moving/Household Goods segment is composed of carriers whose primary business is the moving of personal property from one location to another, usually in conjunction with a relocation by the customer. A total of 96 firms in the Moving/Household Goods industry segment reported $4.9 Billion in annual revenues for 1997 (Table 34). The revenues for the five largest firms account for 51.4% of all the segment's revenues. The largest firm in this segment, United Van Lines, generated 14.8% of the segment's total revenue. Four of the five largest firms in this industry segment account for 51.8% of the segment's total assets (Table 38). The information summarized above suggests that there is a moderate level of dominance by the largest carriers in this industry segment. However, the three largest carriers reporting net profit margins experienced margins below the average achieved by all firms in this industry segment. Furthermore, two of the largest firms reporting returns on equity were below the average return for all firms in the segment, while the third was only slightly higher than the average-20.3% for United Van Lines versus 19.0% for all firms in the segment (Table 39). Overall, the average net profit margin for firms in the industry was 3.3%. In addition, the average return on equity was 19.0% (Table 35). The five firms with the highest return on equity ratios had an average of 103.8% (Table 37). This indicates that these firms were about 5-and-a-half times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are more than 27 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the industry is $2.5 Billion (Table 38), while the total revenue of the 5 most profitable firms is $93.1 Million (Table 36). Thus, carriers in this industry segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this segment handled on average 62,982 shipments and 60.5 Million tons of freight and produced 97.4 Million ton-miles on average. Their average load was 5.96 tons and their average length of haul was 884 miles (Tables 34 and 35). It should be noted, however, that this latter figure represents data from only four of the 96 firms in the sector. Among the five largest carriers, United Van Lines, generated approximately fourteen times the average tons carried by firms in the segment as well as seven times the average ton-miles (Table 36). On average, carriers in this segment owned 82% of their trucks; 62% of their tractors; and 89% of their trailers (Table 34). Three of the five largest carriers in this segment reported information on their equipment ownership. Wherever reported, the data indicated 100% company ownership of equipment. It should be noted, however, that this segment of the trucking industry has a complex corporate structure. Many of the individual firms are agents to the parent van lines. As a consequence, these independent agents operate under the authority of the parent van lines. Thus, United Van Lines reports that there are only 164 vehicle units in its fleet. This number, however, does not reflect the equipment owned by the agents who use the operating authority of the parent company (Table 38). The five most profitable firms varied widely in their equipment ownership strategies. Two firms (Reliable Carriers and Parks Moving & Storage) owned none of their tractors, while a third Anderson Consulting owned only 9%. In contrast, Pilot Transport owned 59% of its tractors and 100% of its trailers. (Table 36). There is less variation among the five smallest companies in their equipment ownership strategies. Among the five smallest companies, two (Dealers Auto Transport and Red Line) own 100% of their tractors, while a third (Morgan & Brother Manhatttan) own 67% of their tractors. The other two carriers did not report information on their tractor ownership, although one, Parkway Auto Transport, indicated that it owned 100% of its trucks (Table 40). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this segment, the average operating ratio is 96.5 (Table 35). Among the five most profitable firms (Table 37), based on return on equity, operating ratio ranged from a low of 84.4% (Pilot Transport) to a high of 111.5% (Parks Moving & Storage). Among the five largest carriers (Table 39), the largest, United Van Lines, had an operating ratio of 97.8. Among this group of carriers, the one with the lowest operating ratio (North American Van Lines) still had a ratio of 95.5. Among the five smallest carriers (Table 41), the firm with the lowest operating ratio had a ratio of 77.2, while the highest operating ratio was 98.8. Clearly, the smallest group of carriers on average had better operating performances than did the largest carriers in this industry segment. Table 34-Moving/Household Goods Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 96 $4,943,727,767 Units in Fleet 87 21,918 Assets 91 $1,369,837,317 Tons Carried 46 2,783,772,528 Ton-Miles 52 5,063,725,315 Shipments 41 2,582,285 Average Size of Load (Tons) 25 5.96 Length of Haul (Miles) 4 884 Average Revenue Per Mile 44 $4.49 Revenue Per Ton 19 $1.77 Revenue Per Ton-Mile 26 $8.40 Average % of Trucks Owned 54 82 % of Tractors Owned 74 62 % of Trailers Owned 76 89 Outside Vehicle Maintenance per Truck/Tractor 35 $3,025 Table 35-Moving/Household Goods Carriers' Average Financial Performance Operating Income $1,404,293 Net Income $1,003,818 Operating Ratio 96.51 Net Profit Margin 3.26% Return on Equity 19.02% Table 36-Moving/Household Goods Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Pilot Transport Brighton, MI $17,116,484 120 $3,807,237 N/A N/A Tri Star Freight System Houston, TX $9,117,991 N/A $619,438 N/A N/A Reliable Carriers Canton, MI $56,266,572 332 $7,899,465 157,248 141,890,157 Parks Moving & Storage Warrendale, PA $5,308,678 120 $3,243,903 N/A N/A Anderson Consulting Oklahoma, OK $5,315,486 45 $2,201,877 196,159 15,812,360 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Pilot Transport N/A N/A N/A N/A $2.53 N/A N/A Tri Star Freight System N/A N/A N/A N/A $3.88 N/A N/A Reliable Carriers 17,472 9.00 902 $3,220.39 $3.57 N/A $0.40 Parks Moving & Storage N/A N/A N/A N/A N/A N/A N/A Anderson Consulting 12,499 9.73 N/A $425.27 $3.27 N/A $0.34 Table 36-Moving/Household Goods Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Pilot Transport N/A 59% 100% $11,418 Tri Star Freight System N/A N/A N/A N/A Reliable Carriers N/A 0% 100% $8,838 Parks Moving & Storage 16% 0% 6% N/A Anderson Consulting N/A 9% 9% $1,669 Table 37-Moving/Household Goods Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Pilot Transport $2,662,610 $3,125,208 84.44 18.26% 127.71% Tri Star Freight System $132,493 $512,887 98.55 5.63% 118.66% Reliable Carriers $7,152,026 $7,950,299 87.29 14.13% 103.93% Parks Moving & Storage -$608,839 $841,438 111.47 15.85% 92.98% Anderson Consulting $519,737 $420,531 90.22 7.91% 75.52% Table 38-Moving/Household Goods Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles United Van Lines Fenton, MO $730,261,166 164 $254,898,650 842,919,490 684,010,272 North American Van Lines Fort Wayne, IN $642,052,000 3,011 $288,812,000 772,432,000 1,561,811,496 Commercial Carriers Troy, MI $481,762,000 N/A N/A N/A N/A Atlas Van Lines Evansville, IN $348,409,593 420 $166,429,269 364,998,242 466,855,757 Mayflower Transit Fenton, MO $337,273,000 N/A N/A N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile United Van Lines 805,727 3.33 N/A $906.34 $3.56 $0.87 $1.07 North American Van Lines 390,132 7.55 N/A $1,645.73 $3.11 $0.83 $0.41 Commercial Carriers N/A N/A N/A N/A N/A N/A N/A Atlas Van Lines 385,560 4.53 N/A $903.65 $3.38 $0.95 $0.75 Mayflower Transit N/A N/A N/A N/A N/A N/A N/A Table 38-Moving/Household Goods Carriers' Average Size and Operating Performance: Five Most Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor United Van Lines N/A N/A 100% N/A North American Van Lines 100% 100% 100% N/A Commercial Carriers N/A N/A N/A N/A Atlas Van Lines N/A 100% 100% N/A Mayflower Transit N/A N/A N/A N/A Table 39-Moving/Household Goods Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity United Van Lines $16,133,742 $8,850,009 97.79 1.21% 20.26% North American Van Lines $28,710,000 $20,214,000 95.53 3.15% 18.79% Commercial Carriers N/A N/A 98.90 N/A N/A Atlas Van Lines $10,196,228 $5,241,876 97.07 1.50% 16.43% Mayflower Transit N/A N/A 98.90 N/A N/A Table 40-Moving/Household Goods Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Nittsu New York Closter, NJ $1,812,558 9 $116,369 N/A N/A Morgan & Brother Manhattan Greenwich, CT $2,126,729 26 $9,050,822 N/A N/A Parkway Auto Transport Clearwater, MN $2,670,758 35 $876,307 8,365 N/A Dealers Auto Transport Porterville, CA $2,722,251 15 $3,755,436 N/A N/A Red Line Emporia, KS $3,174,376 72 $2,672,608 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Nittsu New York N/A N/A N/A N/A N/A N/A N/A Morgan & Brother Manhattan N/A N/A N/A N/A N/A N/A N/A Parkway Auto Transport 478 N/A N/A $5,587.36 $1.64 N/A N/A Dealers Auto Transport N/A N/A N/A N/A $1.96 N/A N/A Red Line N/A N/A N/A N/A N/A N/A N/A Table 40-Moving/Household Goods Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Nittsu New York 0% N/A N/A N/A Morgan & Brother Manhattan 100% 67% 78% N/A Parkway Auto Transport 100% N/A 100% $2,611 Dealers Auto Transport N/A 100% N/A $12,871 Red Line N/A 100% 96% N/A Table 41-Moving/Household Goods Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Nittsu New York $22,168 $8,591 98.78 0.47% 7.38% Morgan & Brother Manhattan $108,139 $244,198 94.92 11.48% 25.51% Parkway Auto Transport $608,901 $144,781 77.20 5.42% 37.67% Dealers Auto Transport $375,879 $372,092 86.19 13.67% 10.54% Red Line $173,402 $64,851 94.54 2.04% 5.07% Summary Charts and Graphs for Moving/Household Goods Carriers Summary Data for Moving/Household Goods Carriers Moving - HHG Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 96 18,112,558 730,261,166 51,497,164 121,528,141 Expenses 96 1,790,390 714,127,424 49,876,946 118,093,097 Operating Income 92 (4,416,308) 28,710,000 1,404,293 4,040,268 Net Income 93 (1,247,853) 20,214,000 1,003,818 2,636,581 Total Assets 91 116,369 288,812,000 15,053,157 43,322,696 Total Liabilities 90 181,928 211,223,618 10,123,297 32,070,582 Total Equity 91 (3,525,817) 107,569,000 5,041,106 12,716,956 Operating Ratio 95 51 150 97 12 Net Profit Margin 92 -12% 32% 3% 6% Return on Equity 91 -77% 128% 19% 31% Individual Expense Items Drivers and Helpers Wages 85 - 3,265,868 258,449 640,255 Insurance 58 (138,097) 10,703,000 624,603 1,834,973 Outside Vehicle Maintenance 54 - 347,222,000 9,290,965 47,096,859 Purchased Transportation 60 - 4,026,535 311,454 904,969 Fleet Composition (Items as a percent of total) Trucks Owned 54 0% 100% 82% 32% Trucks Leased 54 0% 100% 18% 32% Tractors Owned 74 0% 100% 62% 40% Tractors Leased 74 0% 100% 38% 40% Trailers Owned 76 0% 100% 89% 28% Trailers Leased 76 0% 100% 11% 28% Operating Statistics Total Units in Fleet 87 - 3,011 252 479 Total Highway Miles 64 - 2,067,495 16,257,635 40,155,991 Total Tons Carried 46 - 842,919,490 60,516,794 174,842,593 Total Ton-Miles 52 - 1,561,811,496 97,379,333 256,182,639 Total Shipments 41 - 805,727 62,983 148,890 Revenue per Mile 44 $1.07 $20.05 $4.49 $3.74 Revenue per Ton 19 $0.77 $7.85 $1.77 $1.63 Revenue per Shipment 32 $274.78 $15,910.03 $2,800.11 $3,695.54 Revenue per Ton-Mile 26 $0.12 $99.09 $8.40 $23.73 Average Load (Tons) 25 0 13 6 3 Average Haul (Miles) 4 619 1,286 884 292 Outside Vehicle Maintenance per Truck/Tractor 35 - 12,871 3,025 4,126 Valid N (listwise) - VIII. TANKER CARRIERS Overview of Carriers Tanker carriers constitute a specialized type of operations using special equipment designed for handling a variety of commodities in bulk. The majority of bulk products carried by tankers are liquids, however some dry bulk goods, such as flower and sugar are also carried by Tank Carriers. A total of 123 firms in the Tanker Carrier segment reported $3.7 Billion in annual revenues for 1997 (Table 42). The revenues for the five largest firms account for 28.3% of all the segment's revenues. The largest firm in this segment, Chemical Leaman Tank Lines, generated 7.2% of the segment's total revenue. Three of the five largest firms in this industry segment account for 23.2% of the segment's total assets and 20.2% of the total units in the segment's fleet (Table 46). The information summarized above suggests that there is a low level of dominance by the largest carriers in this industry segment. However, this has not prevented three of the five largest firms that reported profit margin data to realize positive performance levels. Indeed, these three firms reported net incomes fluctuating between $6.9 and $13.7 million. These net income figures correspond to profit margins between 4.4 and 5.2%, respectively (Table 47). In contrast, four of the five smallest carriers reported positive net profit margins. The highest profit margin among the five smallest carriers was almost 10% (Table 49). Overall, the average net profit margin for firms in the industry was 2.7%. In addition, the average return on equity was 24.8% (Table 43). The five firms with the highest return on equity ratios had an average of 105% (Table 45). This indicates that these firms were about 4 times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are more than 6 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the industry is $1 Billion (Table 46), while the total revenue of the 5 most profitable firms is $169.1 Million (Table 44). Thus, carriers in this industry segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this segment handled on average 27,900 shipments and 614,800 tons of freight and produced 190 Million ton-miles on average. Their average load was 14.6 tons and their average length of haul was 172 miles (Tables 42 and 43). Among the five largest carriers, Chemical Leaman, generated approximately 6 times the average tons carried by firms in the segment as well as 6 times the average ton-miles (Table 44). On average, carriers in this segment owned 73% of their trucks; 55% of their tractors; and 90% of their trailers (Table 42). Operating strategies among the largest reporting carriers in this segment are quite similar. Each carrier owns approximately one third of its tractors and all of its trailers (Table 46). The five most profitable firms varied significantly with respect to their tractor-ownership patterns. Two of the firms owned less than 12% of their tractors, while the remaining three owned at least 75% of their tractors. All five firms owned their entire trailer fleet. This suggests that various tractor ownership strategies can be equally effective in achieving profitability (Table 44). Furthermore, there is variation among the five smallest companies in their tractor ownership preferences. Among the five smallest companies, only two rely on full tractor and trailer ownership The other carriers in the group of smallest carriers rely on tractor ownership levels ranging from 27% to 59% (Table 48). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this segment, the average operating ratio is 95.6% (Table 43). Among the five most profitable firms (Table 45), based on return on equity, operating ratio ranged from a low of 80.5% (Independent Diversified Transportation) to a high of 99.7% (Transport South). Among the five largest carriers (Table 47), the largest, Chemical Leaman, had an operating ratio of 94.6%. Among this group of carriers, the one with the lowest operating ratio (Montgomery Tank Lines) still had a ratio of 92.1%. Among the five smallest carriers (Table 49), one had operating ratios in excess of 100% and the firm with the lowest operating ratio had a ratio of 85.1%. Clearly, both the smallest and the largest carriers in this industry segment had strong operating ratios. Table 42-Tanker Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 123 $3,661,449,825 Units in Fleet 116 54,739 Assets 118 $1,685,771,972 Tons Carried 103 63,322,443 Ton-Miles 94 17,844,153,667 Shipments 99 2,762,118 Average Size of Load (Tons) 69 14.63 Length of Haul (Miles) 34 172 Average Revenue Per Mile 110 $1.87 Revenue Per Ton 56 $19.62 Revenue Per Ton-Mile 69 $0.16 Average % of Trucks Owned 29 73% % of Tractors Owned 109 55% % of Trailers Owned 111 90% Outside Vehicle Maintenance per Truck/Tractor 112 $6,574 Table 43-Tank Carriers' Average Financial Performance Operating Income $1,359,527 Net Income $891,537 Operating Ratio 95.58 Net Profit Margin 2.73% Return on Equity 24.77% Table 44-- Tank Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Independent Diversified Trptn. Bloominton, MN $7,463,339 37 $1,096,157 770,354 68,003,145 Transport South Smyrna, GA $39,752,870 157 $22,625,538 7,751,880 N/A Enterprise Products Houston, TX $82,799,546 1,156 $17,703,944 N/A N/A Central Transport High Point, NC $35,711,984 1,170 $45,802,781 N/A 235,736,201 Burnett (George W.) Buffalo, NY $3,415,549 74 $1,876,866 352,186 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Independent Diversified Trptn. 30,210 25.50 88.28 $247.05 $2.80 $9.69 $0.11 Transport South 280,967 N/A N/A $141.49 $1.62 $5.13 N/A Enterprise Products N/A N/A N/A N/A $1.70 N/A N/A Central Transport N/A 12.12 N/A N/A $1.84 N/A $0.15 Burnett (George W.) 14,239 N/A N/A $239.87 $2.01 $9.70 N/A Table 44-- Tank Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Independent Diversified Trptn. N/A 6% 100% $13,646 Transport South N/A 80% 100% $37,728 Enterprise Products N/A 11% 100% $2,430 Central Transport N/A 75% 100% $904 Burnett (George W.) N/A 100% 100% N/A Table 45-Tank Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Independent Diversified Transportation $1,458,349 $1,486,699 80.46 19.92% 177.76% Transport South $122,413 $8,642,371 99.69 21.74% 107.30% Enterprise Products $2,148,546 $2,125,546 97.41 2.57% 100.02% Central Transport $3,290,158 $551,043 90.79 1.54% 100.00% Burnett (George W.) $249,565 $1,051,126 92.69 30.77% 99.84% Table 46-- Tank Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles (in Thousands) Chemical Leaman Tank Lines Exton, PA $262,135,130 4,420 $135,297,039 3,655,166 1,140,289 Montgomery Tank Lines Plant City, FL $252,942,603 4,376 $178,347,165 N/A 1,552,667 Matlack Wilmington, DE $231,709,000 N/A N/A N/A N/A DSI Transports Houston, TX $159,211,948 2,240 $77,020,000 N/A N/A Superior Carriers Oak Brook, IL $129,787,000 N/A N/A N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Chemical Leaman Tank Lines 216,282 9.97 312 $1,212.01 $2.29 $71.72 $0.23 Montgomery Tank Lines N/A 10.86 N/A N/A $1.77 N/A $0.16 Matlack N/A N/A N/A N/A N/A N/A N/A DSI Transports N/A N/A N/A N/A $1.58 N/A N/A Superior Carriers N/A N/A N/A N/A N/A N/A N/A Table 46-- Tank Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Chemical Leaman Tank Lines N/A 29% 100% $2,123 Montgomery Tank Lines N/A 34% 100% $2,973 Matlack N/A N/A N/A N/A DSI Transports N/A 37% 100% $2,759 Superior Carriers N/A N/A N/A N/A Table 47-Tank Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Chemical Leaman Tank Lines $14,071,333 $13,740,238 94.63 5.24% 18.37% Montgomery Tank Lines $19,977,128 $10,224,947 92.10 4.04% 12.89% Matlack N/A N/A 97.00 N/A N/A DSI Transports $9,275,880 $6,932,321 94.17 4.35% 22.82% Superior Carriers N/A N/A 93.20 N/A N/A Table 48-- Tank Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Hazen Petroleum Ellwood City, PA $1,176,214 12 $1,524,568 N/A N/A Sunbelt Chemicals Atmore, AL $1,934,650 N/A $6,561,693 N/A N/A M.P.C. Trucking Kimberton, PA $2,369,379 80 $1,659,639 70,125 N/A CBW Transport Service Wood River, IL $2,702,935 84 $1,032,388 187,047 12,865,229 System Transport Signal Hill, CA $3,063,217 57 $1,335,398 N/A N/A Carrier Total Ship-ments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Hazen Petroleum N/A N/A N/A N/A N/A N/A N/A Sunbelt Chemicals N/A N/A N/A N/A $0.95 N/A N/A M.P.C. Trucking 2,505 N/A N/A $945.86 $1.92 $33.79 N/A CBW Transport Service 8,168 11.34 68.78 $330.92 $2.38 $14.45 $0.21 System Transport 2,520 N/A N/A $1,215.56 $4.64 N/A N/A Table 48-- Tank Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Hazen Petroleum 100% 100% 100% $6,691 Sunbelt Chemicals N/A N/A N/A N/A M.P.C. Trucking N/A 100% 100% $10,240 CBW Transport Service N/A 59% 100% $2,983 System Transport 0% 27% 94% $4,984 Table 49-Tank Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Hazen Petroleum -$19,948 $33,087 101.70 2.81% 10.12% Sunbelt Chemicals $287,426 -$566,765 85.14 -29.30% N/A M.P.C. Trucking $339,840 $235,973 85.66 9.96% 16.08% CBW Transport Service $13,978 $174,206 99.48 6.45% 33.27% System Transport $164,765 $137,363 94.62 4.48% 14.73% Summary Charts and Graphs for Tanker Carriers Summary Data for Tanker Carriers Tanker Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 123 1,176,214 262,135,130 29,767,885 48,337,133 Expenses 123 - 248,063,797 26,362,029 41,952,349 Operating Income 120 (809,818) 19,977,128 1,359,527 2,682,039 Net Income 120 (1,083,777) 13,740,238 891,537 2,002,832 Total Assets 118 - 178,347,165 14,286,203 24,973,864 Total Liabilities 118 - 99,026,947 8,145,496 13,950,249 Total Equity 118 (1,738,689) 79,320,218 6,140,699 12,340,364 Operating Ratio 122 79 118 96 6 Net Profit Margin 120 -29% 31% 3% 6% Return on Equity 114 -88% 260% 25% 40% Individual Expense Items Drivers and Helpers Wages 65 - 4,998,427 1,374,222 1,080,151 Insurance 115 - 6,275,709 765,615 1,100,060 Outside Vehicle Maintenance 115 - 3,849,831 667,628 847,076 Purchased Transportation 65 (28,696) 12,181,174 1,720,624 1,934,390 Fleet Composition (Items as a percent of total) Trucks Owned 29 0% 100% 73% 39% Trucks Leased 29 0% 100% 27% 39% Tractors Owned 109 0% 100% 55% 37% Tractors Leased 109 0% 100% 45% 37% Trailers Owned 111 0% 100% 90% 26% Trailers Leased 111 0% 100% 10% 26% Operating Statistics Total Units in Fleet 116 12 4,420 472 694 Total Highway Miles 116 - 142,942,631 14,623,035 22,229,918 Total Tons Carried 103 - 7,751,880 614,781 1,182,683 Total Ton-Miles 94 - 1,552,667,425 189,831,422 300,556,951 Total Shipments 99 - 280,967 27,900 47,125 Revenue per Mile 110 $0.95 $5.71 $1.87 $0.71 Revenue per Ton 56 $3.13 $71.72 $19.62 $17.47 Revenue per Shipment 62 $125.09 $1,347.29 $445.49 $324.75 Revenue per Ton-Mile 69 $0.05 $1.30 $0.16 $0.16 Average Load (Tons) 69 3 32 15 6 Average Haul (Miles) 34 19 757 172 165 Outside Vehicle Maintenance per Truck/Tractor 112 - 123,029 6,574 12,618 Valid N (listwise) 2 IX. REFRIGERATED CARRIERS Overview of Carriers Refrigerated carriers transport perishable products that require special refrigeration or temperature-controlled equipment. A total of 126 firms in the industry segment of refrigerated carriers reported $4.6 Billion in annual revenues for 1997 (Table 50). The revenues for the five largest firms account for 31.5% of all the segment's revenues. The largest firm in this segment, New Prime, generated 7.5% of the segment's total revenue. Only two of the five largest firms in this industry segment reported data on their assets and fleet size. Together, these two firms account for 6.4% of the segment's total assets and 13.5% of the total units in the segment's fleet (Table 54). The information summarized above suggests that there is a high level of competition in this industry segment. However, this has not prevented carriers from generating positive profit margins. Two of the five largest firms reported net incomes of $39.3 and $8.7 million, respectively. These net incomes resulted in a net profit margin of 11.4% and 3.6%, respectively. In addition, the five smallest carriers in the segment reported positive net profit margins. Indeed, profit margins among the five smallest firms ranged from 0.5% to 15.5% (Table 57). Overall, the average net profit margin for firms in the industry was 2.2%. In addition, the average return on equity was 15.3% (Table 51). The five firms with the highest return on equity ratios had an average of 148.3% (Table 53). This indicates that these firms were almost 10 times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are almost 25 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the industry is $1.4 Billion (Table 54), while the total revenue of the 5 most profitable firms is $58.1 Million (Table 52). Thus, carriers in this industry segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this segment handled on average 19,848 shipments and 297,000 tons of freight and produced 289 Million ton-miles on average. Their average load was 16.5 tons and their average length of haul was 927 miles (Tables 50 and 51). Among the five largest carriers, New Prime, generated approximately 17 times the average tons carried by firms in the segment (Table 52). On average, carriers in this segment owned 69% of their trucks; 47% of their tractors; and 84% of their trailers (Table 50). Two of the 5 largest carriers in the segment reported information about their fleet ownership. Among these 2 firms, one owned none of their tractors and all of their trailers, while the other owned all of its tractors and trailers (Table 54). Four of the five most profitable firms owned less than 10% of their tractors with three owning none of their tractors. Only one firm in the group relied exclusively on owned equipment (Western Refrigerated Freight Services). This suggests that neither an all owner-operator nor an all-company driver strategy is a key factor in devising a profitable business approach in this industry (Table 52). There is, however, a tendency among these three firms to favor owner operator fleets. The fleet ownership information reported by three of the five smallest carriers also indicates a lack of uniformity with regards to fleet ownership strategies. Two of the three reporting firms indicated that they exclusively use owner operators for their tractors. The third firm, in contrast, owns 69% of its tractors (Table 56). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this segment, the average operating ratio is 97.0% (Table 51). Among the five most profitable firms (Table 52), based on return on equity, operating ratio ranged from a low of 73.8% (Western Refrigerated Freight Services) to a high of 97% (Hames Trucking). Among the five largest carriers (Table 55), the largest, New Prime, had an operating ratio of 86.9. This ratio was the smallest (most profitable) of any of the five largest carriers. Indeed the five largest carriers in the segment reported operating ratios that ranged from 86.9% (the best) to 98.8% (the worst). All of these ratios are above the breakeven point. On the other hand, among the five smallest carriers (Table 57), three had operating ratios in excess of 100 and the firm with the lowest operating ratio still had a ratio of 97.8%. Clearly, the largest carriers in this industry segment had better operating ratios than the smallest firms in the industry. Table 50-Refrigerated Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 126 $4,590,125,446 Units in Fleet 121 56,218 Assets 122 $1,855,410,304 Tons Carried 97 28,840,042 Ton-Miles 104 30,052,117,704 Shipments 97 1,925,317 Average Size of Load (Tons) 55 16.47 Length of Haul (Miles) 32 927 Average Revenue Per Mile 105 $1.39 Revenue Per Ton 49 $65.76 Revenue Per Ton-Mile 58 $0.14 Average % of Trucks Owned 34 69% % of Tractors Owned 106 47% % of Trailers Owned 114 84% Outside Vehicle Maintenance per Truck/Tractor 108 $4,291 Table 51-Refrigerated Carriers' Average Financial Performance Operating Income $963,545 Net Income $475,005 Operating Ratio 96.95 Net Profit Margin 2.19% Return on Equity 15.27% Table 52-Refrigerated Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Western Refrigerated Freight Svcs Phoenix, AZ $3,813,321 44 $877,051 48,056 N/A Hames Trucking East Point, GA $5,608,960 20 $635,268 N/A N/A Am Can Transport Service Anderson, SC $20,499,905 83 $3,406,214 109,537 N/A National Food Express Grand Rapids, MI $3,586,091 205 $1,376,188 49,647 N/A Excel Transportation Wichita, KS $24,548,598 313 $2,714,459 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Western Refrigerated Freight Svcs 2,574 N/A N/A $1,481.48 N/A $79.35 N/A Hames Trucking N/A N/A N/A N/A $2.50 N/A N/A Am Can Transport Service 31,863 N/A N/A $643.38 $1.80 $187.15 N/A National Food Express 2,613 N/A N/A $1,372.40 $1.95 $72.23 N/A Excel Transportation N/A N/A N/A N/A N/A N/A N/A Table 52-Refrigerated Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Western Refrigerated Freight Svcs N/A 100% 100% $4,884 Hames Trucking N/A 0% N/A N/A Am Can Transport Service N/A 9% 100% $2,843 National Food Express N/A 0% 52% $7,601 Excel Transportation N/A 0% 100% $726 Table 53-Refrigerated Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Western Refrigerated Freight Svcs $999,092 $994,608 73.80 26.08% 178.26% Hames Trucking $169,327 $169,327 96.98 3.02% 167.16% Am Can Transport Service $3,871,807 $3,871,807 81.08 18.89% 166.42% National Food Express $623,252 $623,252 88.07 17.38% 115.05% Excel Transportation $879,034 $879,034 94.34 3.58% 114.34% Table 54-Refrigerated Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles New Prime Springfield, MO $345,422,841 4,329 $26,857,423 5,116,703 N/A C R England & Sons Salt Lake City, UT $315,555,000 N/A N/A N/A N/A Ameritruck Distribution Fort Worth, TX $291,552,000 N/A N/A N/A N/A Rocor International Oklahoma City, OK $253,577,000 N/A N/A N/A N/A F.F.E. Transporta-tion Service Dallas, TX $241,173,387 3,283 $92,076,193 2,733,455 2,894,895,127 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile New Prime 227,409 N/A N/A $1,518.95 $1.11 $67.51 N/A C R England & Sons N/A N/A N/A N/A N/A N/A N/A Ameritruck Distribution N/A N/A N/A N/A N/A N/A N/A Rocor International N/A N/A N/A N/A N/A N/A N/A F.F.E. Transporta-tion Service 419,642 19.38 1,059 $574.71 $1.61 $88.23 $0.08 Table 54-Refrigerated Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor New Prime N/A 100% 100% N/A C R England & Sons N/A N/A N/A $1,882 Ameritruck Distribution N/A N/A N/A N/A Rocor International N/A N/A N/A N/A F.F.E. Transporta-tion Service N/A 0% 100% $11,358 Table 55-Refrigerated Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity New Prime $45,293,662 $39,323,180 86.89 11.38% 29.43% C R England & Sons N/A N/A 94.10 N/A N/A Ameritruck Distribution N/A N/A 98.60 N/A N/A Rocor International N/A N/A 98.80 N/A N/A F.F.E. Transporta-tion Service $12,711,043 $8,656,822 94.73 3.59% 10.34% Table 56-Refrigerated Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Conte Transportation Ocoee, FL $2,173,279 N/A $106,726 N/A N/A Greenstein Trucking Pompano Beach, FL $2,279,154 22 $406,215 54,912 24,668,490 Altman (William B.) Fenelton, PA $2,954,297 66 $894,202 N/A N/A Vitalis Truck Lines Des Moines, IA $2,975,740 160 $4,287,338 63,235 24,169,777 Minnesota Valley Transport New Ulm, MN $3,149,776 62 $45,324 46,905 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Conte Transportation N/A N/A N/A N/A N/A N/A N/A Greenstein Trucking 3,328 16.84 449 $684.84 $1.56 $41.51 $0.09 Altman (William B.) N/A N/A N/A N/A $1.39 N/A N/A Vitalis Truck Lines 4,074 12.26 382 $730.42 $1.51 $47.06 $0.12 Minnesota Valley Transport 2,893 N/A N/A N/A $1.06 $67.15 N/A Table 56-Refrigerated Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Conte Transportation N/A N/A N/A N/A Greenstein Trucking N/A N/A 100% N/A Altman (William B.) 0% 0% 0% $4,768 Vitalis Truck Lines 100% 69% 87% $1,167 Minnesota Valley Transport N/A 0% 0% $7,324 Table 57-Refrigerated Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Conte Transportation -$2,085 $200,780 100.10 9.24% N/A Greenstein Trucking $50,220 $49,266 97.80 2.16% 49.81% Altman (William B.) -$87,915 $16,814 102.98 0.57% 2.41% Vitalis Truck Lines -$109,029 $461,703 103.66 15.52% 12.61% Minnesota Valley Transport $28,370 $29,906 99.10 0.95% 100.52% Summary Charts and Graphs for Refrigerated Carriers Summary Data for Refrigerated Carriers Refrigerated Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 126 2,173,279 345,422,841 36,429,567 64,021,757 Expenses 126 2,175,364 300,129,179 35,416,508 60,913,252 Operating Income 122 (58,815,021) 45,293,662 963,545 7,242,044 Net Income 122 (58,815,021) 39,323,180 475,005 6,737,732 Total Assets 122 45,324 268,575,423 15,208,281 33,257,741 Total Liabilities 122 (752,857) 134,979,718 8,144,146 17,660,897 Total Equity 122 (1,736,859) 133,595,705 7,064,135 18,128,421 Operating Ratio 125 74 109 97 5 Net Profit Margin 121 -9% 26% 2% 5% Return on Equity 118 -180% 178% 15% 49% Individual Expense Items Drivers and Helpers Wages 61 - 11,038,000 1,138,417 1,858,639 Insurance 121 43,699 10,192,276 878,256 1,413,343 Outside Vehicle Maintenance 113 - 10,449,079 526,067 1,138,093 Purchased Transportation 61 - 37,099,366 2,400,707 5,023,934 Fleet Composition (Items as a percent of total) Trucks Owned 34 0% 100% 69% 44% Trucks Leased 34 0% 100% 31% 44% Tractors Owned 106 0% 100% 47% 40% Tractors Leased 106 0% 100% 53% 40% Trailers Owned 114 0% 100% 84% 32% Trailers Leased 114 0% 100% 16% 32% Operating Statistics Total Units in Fleet 121 - 4,329 465 755 Total Highway Miles 115 - 311,103,340 23,119,160 41,711,688 Total Tons Carried 97 - 5,116,703 297,321 780,396 Total Ton-Miles 104 - 3,251,699,778 288,962,670 592,023,105 Total Shipments 97 - 419,642 19,849 61,761 Revenue per Mile 105 $0.61 $4.52 $1.39 $0.53 Revenue per Ton 49 $7.17 $187.15 $65.76 $32.94 Revenue per Shipment 47 $168.95 $3,137.00 $1,110.81 $627.83 Revenue per Ton-Mile 58 $0.02 $1.66 $0.14 $0.27 Average Load (Tons) 55 1 34 16 6 Average Haul (Miles) 32 46 3,023 927 593 Outside Vehicle Maintenance per Truck/Tractor 108 - 85,904 4,291 8,573 Valid N (listwise) 2 X. BULK MATERIALS - NON TANK CARRIERS Overview of Carriers The Bulk Materials - Non Tank segment includes all bulk commodities not transported by tankers. This segment includes carriers, which transport items such as sand, gravel, grain and mine ore. A total of 75 firms in the Bulk Materials - Non Tank industry segment reported $1.27 Billion in annual revenues for 1997 (Table 58). The revenues for the five largest firms account for 29.4% of all the segment's revenues. The largest firm in the industry, Bulkmatic Transport, generated 8.9% of the segment's total revenue. The five largest firms in the industry account for 29.4% of the segment's total assets and 29.8% of the total units in the segment's fleet (Table 62). The information summarized above suggests that there is a high level of competition in this industry segment. However, this has not prevented the carriers from generating positive profit margins. The largest firm in the industry segment reported net income of $4.7 Million, resulting in a net profit margin of 4.2% (Table 63). In addition, the five smallest firms in the industry segment have obtained positive levels of profitability. On average these firms reported a net profit margin of 4.2% (Table 65). Overall, the average net profit margin for firms in the industry was 3.3%. In addition, the average return on equity was 15.1% (Table 59). The five firms with the highest return on equity ratios had an average of 76.1% (Table 61). This indicates that these firms were about 5 times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are more than 8 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the industry is $373.5 Million (Table 62), while the total revenue of the 5 most profitable firms is $45.0 Million (Table 60). Thus, carriers in this industry segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this segment handled on average 38,495 shipments and 1.08 Million tons of freight and produced 319.4 Million ton-miles on average. Their average load was 17.5 tons and their average length of haul was 183.4 miles (Tables 58 and 59). Among the five largest carriers, Bulkmatic Transport, generated more than 4 times the average ton-miles (Table 60). On average, carriers in this segment owned 71% of their trucks; 68% of their tractors; and 50% of their trailers (Table 58). Among the five largest carriers in this segment, operating strategies were very similar. All of the five largest carriers own at least 82% of their tractors and all of their trailers (Table 62). The five most profitable firms relied almost exclusively on company drivers. Only one firm, Food Express, relied more heavily on owner operators. This might suggests that, in this segment, reliance on company drivers is a profitable approach (Table 60). Furthermore, three of the five smallest companies rely heavily on company drivers. Among the five smallest companies, only one, Earl Martin, owns less than a 100% of its tractors. The other carriers in the group of smallest carriers rely exclusively on company drivers to operate their tractors (Table 64). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this segment, the average operating ratio is 95.9 (Table 59). Among the five most profitable firms (Table 61), based on return on equity, operating ratio ranged from a low of 82 (Riverton Trucker) to a high of 94.7 (Food Express). Among the five largest carriers (Table 63), the largest, Bulkmatic Transport, had an operating ratio of 92.5. Among this group of carriers, the one with the lowest (best) operating ratio (A&R Transport) had a ratio of 87.4. Among the five smallest carriers (Table 65), three had operating ratios in excess of 100 and the firm with the lowest (best) operating ratio had a ratio of 95.5%. It appears that the largest carriers in the segment have a better operating performance than do the smallest. In conclusion, the information collected on this industry segment indicates that among the largest and most profitable firms there is a heavy reliance on their own human resources and equipment. This fact, along with the short average lengths of haul reported, suggest that there is an emphasis in this industry segment on customer service, in the form of regular, fixed, and time-sensitive deliveries. The good performance indicators reported by carriers in this segment could be the result of the combination of these factors. Table 58--Bulk Materials - Non Tank Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 75 $1,272,262,509 Units in Fleet 73 20,322 Assets 75 $707,667,811 Tons Carried 25 26,897,400 Ton-Miles 22 7,026,641,088 Shipments 28 1,077,872 Average Size of Load 21 17.5 Tons Length of Haul 11 183.4 Miles Average Revenue Per Mile 56 $1.96 Revenue Per Ton 23 $17.92 Revenue Per Ton-Mile 22 $0.11 Average % of Trucks Owned 73 71% % of Tractors Owned 73 68% % of Trailers Owned 73 50% Outside Vehicle Maintenance per Truck/Tractor 68 $5,354 Table 59-- Bulk Materials - Non Tank Carriers' Average Financial Performance Operating Income $845,484 Net Income $583,651 Operating Ratio 95.94 Net Profit Margin 3.26% Return on Equity 15.05% Table 60-- Bulk Materials - Non Tank Carriers' Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Eagle Valley Shawneetown, IL $5,586,280 39 $727,644 N/A N/A Bagshaw Trucking Memphis, IN $8,261,395 88 $2,514,252 N/A N/A Riverton Trucker Clarksville, IN $8,692,800 142 $3,925,877 N/A N/A Food Express Arcadia, CA $16,186,727 220 $4,768,425 N/A N/A Threet's Trucking Sturtevant, WI $6,258,353 30 $1.382,336 196,720 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Eagle Valley 579 N/A N/A $9,648 $4.04 N/A N/A Bagshaw Trucking N/A N/A N/A N/A N/A N/A N/A Riverton Trucker N/A N/A N/A N/A N/A N/A N/A Food Express N/A N/A N/A N/A $4.00 N/A N/A Threet's Trucking 7,580 N/A N/A $826 N/A $31.81 N/A Table 60-- Bulk Materials - Non Tank Carriers' Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Eagle Valley N/A 100% 100% $4,227 Bagshaw Trucking 63% 100% 100% $2,925 Riverton Trucker 75% 100% 100% $5,087 Food Express N/A 41% 100% $2,381 Threet's Trucking 100% 100% 100% $16,601 Table 61-- Bulk Materials - Non Tank Carriers' Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Eagle Valley $412,505 $226,037 92.62 4.05% 132.49% Bagshaw Trucking $763,155 $820,604 90.76 9.93% 95.61% Riverton Trucker $1,566,914 $821,958 81.97 9.46% 54.70% Food Express $860,362 $600,727 94.68 3.71% 51.62% Threet's Trucking $485,933 $469,329 92.24 7.50% 46.22% Table 62-- Bulk Materials - Non Tank Carriers' Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Bulkmatic Transport Griffith, IN $113,334,545 1,906 $94,783,819 N/A 1,413,981,558 Gray (Jack) Transport Gary, IN $76,742,021 713 $52,625,908 N/A N/A A & R Transport Joliet, IL $70,256,272 944 $76,018,682 1,469,600 369,032,892 Schwerman Trucking Milwaukee, WI $62,119,213 1,819 $33,427,301 4,107,223 466,998,629 Beelman Truck St. Libory, IL $51,045,516 674 $24,759,971 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Bulkmatic Transport N/A 22.85 N/A N/A $1.83 N/A $0.08 Gray (Jack) Transport N/A N/A N/A N/A N/A N/A N/A A & R Transport 66,800 12.00 251 $1,052 $2.28 $47.81 $0.19 Schwerman Trucking 159,325 12.47 114 $390 $1.66 $15.12 $0.13 Beelman Truck N/A N/A N/A N/A $1.48 N/A N/A Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Bulkmatic Transport N/A 85% 100% $4,446 Gray (Jack) Transport N/A 100% 100% $9,557 A & R Transport N/A 100% 100% $4,710 Schwerman Trucking N/A 82% 100% $1,540 Beelman Truck N/A 100% 100% $1,381 Table 63-- Bulk Materials - Non Tank Carriers' Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Bulkmatic Transport $8,518,787 $4,705,858 92.48 4.15 19.01 Gray (Jack) Transport $3,550,963 $3,550,963 95.37 4.63% 16.68% A & R Transport $8,839,985 $3,466,145 87.42 4.93% 23.44% Schwerman Trucking $3,113,265 $1,150,003 94.99 1.85% 13.07% Bellman Truck $3,479,777 $2,640,703 93.18 5.17% 13.01% Table 64-- Bulk Materials - Non Tank Carriers' Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Pritchett Trucking Co. Pryor, OK $2,010,570 43 $1,203,959 16,088 N/A Hribar Trucking Caledonia, WI $2,054,784 63 $1,315,003 487,338 N/A Hazel Trucking Co. Macon, GA $3,349,885 28 $1,085,675 N/A N/A Martin, (Earl R.) East Earl, PA $3,420,306 68 $2,172,155 184,632 N/A Wanatah Trucking West Lafayette, IN $3,792,766 29 $2,821,911 529,508 27,472,566 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Pritchett Trucking Co. 653 N/A N/A 3,079 $3.62 N/A N/A Hribar Trucking 20,175 N/A N/A $102 $1.60 $4.22 N/A Hazel Trucking Co. N/A N/A N/A N/A $1.48 N/A N/A Martin, (Earl R.) 7,693 N/A N/A $445 $1.12 $18.52 N/A Wanatah Trucking 24,628 16.13 52 $154 $2.23 $7.16 $0.14 Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Pritchett Trucking Co. 100% N/A 100% $11,814 Hribar Trucking 93% N/A 94% $6,045 Hazel Trucking Co. 100% 100% 100% $12,553 Martin, (Earl R.) N/A 73% 80% $11,852 Wanatah Trucking 100% 100% 100% $8,229 Table 65-- Bulk Materials - Non Tank Carriers' Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Pritchett Trucking Co. -$72,285 -$60,912 103.60 -3.03% -14.13% Hribar Trucking -$62,173 $171,386 103.03 8.34% 16.82% Hazel Trucking Co. $177,743 $176,711 94.69 5.28% 36.14% Martin, (Earl R.) -$201,292 $190,182 105.89 5.56% 10.54% Wanatah Trucking $169,310 $185,400 95.54 4.89% 7.75% Charts and Graphs for Bulk Materials - Non Tank Carriers Summary Data for Bulk Materials - Non Tank Carriers Bulk Materials - Non Tank Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 75 2,010,570 110,000,000 17,000,000 19,000,000 Expenses 75 2,082,855 100,000,000 16,000,000 17,000,000 Operating Income 75 (913,354) 8,839,985 845,484 1,603,251 Net Income 75 (1,888,678) 4,705,858 583,651 1,050,607 Total Assets 75 507,478 94,783,819 9,435,571 16,000,000 Total Liabilities 75 60,859 70,000,000 5,653,642 12,000,000 Total Equity 75 (772,542) 25,000,000 3,724,813 5,177,977 Operating Ratio 75 80 110 96 5 Net Profit Margin 75 -14% 25% 3% 5% Return on Equity 72 -76% 132% 15% 29% Individual Expense Items Drivers and Helpers Wages 36 54,953 2,381,743 1,135,608 648,875 Insurance 75 (269,907) 3,425,681 442,245 578,167 Outside Vehicle Maintenance 70 - 3,196,608 429,692 571,898 Purchased Transportation 75 - 8,895,012 1,307,661 2,025,177 Fleet Composition (Items as a percent of total) Trucks Owned 73 0% 100% 79% 39% Trucks Leased 73 0% 100% 21% 39% Tractors Owned 73 0% 100% 72% 34% Tractors Leased 73 0% 100% 28% 34% Trailers Owned 73 0% 100% 89% 27% Trailers Leased 73 0% 100% 11% 27% Operating Statistics Total Units in Fleet 73 28 1,906 278 338 Total Highway Miles 60 25,000 61,881,031 10,000,000 11,000,000 Total Tons Carried 25 16,088 4,107,223 1,075,896 1,117,598 Total Ton-Miles 22 27,472,566 1,400,000,000 320,000,000 330,000,000 Total Shipments 28 300 159,325 38,495 44,302 Revenue per Mile 56 $0.80 $6.71 $1.96 $1.12 Revenue per Ton 23 $3.75 $47.81 $17.92 $13.72 Revenue per Shipment 26 $71.24 $3,078.97 $629.86 $652.64 Revenue per Ton-Mile 22 $0.03 $0.24 $0.11 $0.06 Average Load (Tons) 21 9 25 18 5 Average Haul (Miles) 11 52 538 183 137 Outside Vehicle Maintenance per Truck/Tractor 68 - 43,241 5,354 6,492 Valid N (listwise) 3 XI. BUILDING MATERIALS CARRIERS Overview of Carriers Building Materials include lumber, cut stone, cement, sheet rock and other building products normally carried on flatbed trucks. This category does not include dry bulk products such as sand, gravel, crushed stone or other products usually transported by dump trucks. A total of 31 firms in the Building Materials industry segment reported $737.3 Million in annual revenues for 1997 (Table 66). The revenues for the five largest firms account for 77.25% of all the segment's revenues. The largest firm in this segment, Builders' Transport, generated 39.1% of the segment's total revenue. Four of the five largest firms in this industry segment account for 80.4% of the segment's total assets and 70.0% of the total units in the segment's fleet (Table 70). The information summarized above suggests that there is a high level of dominance by the largest carriers in this industry segment. However, two of the five largest firms experienced negative profit margins with the largest having a net income loss of $50.5 Million, resulting in a net profit margin of -17.5% (Table 71). In contrast, four of the five smallest carriers reported positive net profit margins, although the highest profit margin reported was only 5.6% (Table 73). Overall, the average net profit margin for firms in the industry was 1%. In addition, the average return on equity was 15.2% (Table 67). The five firms with the highest return on equity ratios had an average of 59.8% (Table 69). This indicates that these firms were about 4 times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are more than 10 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the industry is $569.4 Million (Table 70), while the total revenue of the 5 most profitable firms is $48.8 Million (Table 68). Thus, carriers in this industry segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this segment handled on average 19,551 shipments and 1.1 Million tons of freight and produced 335.7 Million ton-miles on average. Their average load was 18.7 tons and their average length of haul was 443.5 miles (Tables 66 and 67). Among the five largest carriers, Builders Transport generated approximately nine times the average tons carried by firms in the segment as well as ten times the average ton-miles (Table 68). On average, carriers in this segment owned 48% of their trucks; 58% of their tractors; and 77% of their trailers (Table 66). Among the five largest carriers in this segment, operating strategies differed. While Builders Transport owns 88% of its tractors, Kennedy Trucking owns only 57% of its tractors and Great American Lines depends exclusively on owner-operators for its tractors (Table 70). Among the five most profitable firms in the segment, average tons and ton-miles for reporting firms are substantially below segment averages. This again confirms the finding that firm profitability and size are not strongly related in this segment. With respect to average length of haul, among the most profitable firms reporting, one, Ameri-Co Carriers, Inc., had an average four times the average for all firms in the segment, while another of the five most profitable firms, Alger Company, had an average length of haul of only 145 miles, substantially below the average for all firms in the segment. Thus, segment profitability does not appear to be related directly to average length of haul, firms with well above average and well below average haul lengths are included in the group of most profitable segment carriers (Table 68). The five most profitable firms relied either exclusively on owner-operators (Southwest Express, Ameri-Co Carriers, and Alger Company) or company drivers (Hartwick & Hand, Inc. and Sylvester Material Company) to handle their tractor operations. This suggests that neither an all owner-operator or an all company driver strategy is a key factor in devising a profitable business approach (Table 68). Furthermore, there is variation among the five smallest companies in their reliance on company drivers and owner-operators. Among the five smallest companies, only one, Northwood Transport, relies exclusively on either company drivers or owner-operators (they rely on company drivers exclusively). The other carriers in the group of smallest carriers rely on company drivers to operate from 13% to 84% of their tractors (Table 72). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this segment, the average operating ratio is 97.2 (Table 67). Among the five most profitable firms (Table 69), based on return on equity, operating ratio ranged from a low of 87.6% (Sylvester Material Company) to a high of 98.1% (Ameri-Co Carriers, Inc.). Among the five largest carriers (Table 71), the largest, Builders Transport, had an operating ratio of 112.2. Among this group of carriers, the one with the lowest operating ratio (Kelly truck Lines) still had a ratio of 94.1. Among the five smallest carriers (Table 73), three had operating ratios in excess of 100 and the firm with the lowest operating ratio still had a ratio of 94.1%. Clearly, neither the smallest nor the largest carriers in this industry segment had the best operating ratios. Table 66--Building Materials Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 31 $737,258,651 Units in Fleet 30 13,005 Assets 29 $309,513,018 Tons Carried 20 21,114,924 Ton-Miles 17 5,706,839,150 Shipments 19 371,466 Average Size of Load 16 18.7 Tons Length of Haul 15 443.5 Miles Average Revenue Per Mile 23 $1.33 Revenue Per Ton 18 $28.18 Revenue Per Ton-Mile 17 $0.11 Average % of Trucks Owned 29 48% % of Tractors Owned 29 58% % of Trailers Owned 29 77% Outside Vehicle Maintenance per Truck/Tractor 29 $5,359 Table 67-- Building Materials Carriers' Average Financial Performance Operating Income ($846,565) Net Income ($1,531,805) Operating Ratio 97.15 Net Profit Margin 0.97% Return on Equity 15.21% Table 68-- Building Materials Carriers' Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Southwest Express Glendale, AZ $4,277,800 39 $435,100 N/A N/A Ameri-Co Carriers, Inc. Scottsbluff, NE $10,313,000 183 $834,000 131,000 237,233,000 Hartwick & Hand, Inc. Victorville, CA $7,675,055 198 $3,931,626 N/A N/A Alger (Geo. F.), Company Romulus, MI $9,382,943 135 $1,353,647 308,370 44,584,877 Sylvester Material Company Sylvania, OH $17,120,633 163 $9,316,400 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Southwest Express N/A N/A N/A N/A N/A N/A N/A Ameri-Co Carriers, Inc. 11,000 24 1,807 $944 $1.04 N/A $0.04 Hartwick & Hand, Inc. N/A N/A N/A N/A $1.42 N/A N/A Alger (Geo. F.), Company 12,081 26 145 $777 N/A $30.43 $0.21 Sylvester Material Company N/A N/A N/A N/A N/A N/A N/A Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Southwest Express 0% 0% N/A $900 Ameri-Co Carriers, Inc. N/A 0% 100% $5,047 Hartwick & Hand, Inc. 100% 100% 100% $7,139 Alger (Geo. F.), Company N/A 0% 100% $636 Sylvester Material Company 45% 100% 100% $4,524 Table 69-- Building Materials Carriers' Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Southwest Express $96,100 $96,100 97.75 2.25% 113% Ameri-Co Carriers, Inc. $201,000 $63,000 98.05 0.61% 56% Hartwick & Hand, Inc. $443,835 $309,064 94.22 4.03% 56% Alger (Geo. F.), Company $303,664 $193,847 96.76 2.07% 43% Sylvester Material Company $2,127,706 $749,599 87.58 4.38% 31% Table 70-- Building Materials Carriers' Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Builders Transport Camden, SC $288,145,000 7,144 $208,895,000 9,491,000 4,059,314,000 Mercer Transportation Louisville, KY $164,206,000 N/A N/A N/A N/A Great American Lines Murrysville, PA $71,887,133 882 $10,044,427 3,158,071 N/A Kennedy (Louis J.) Trucking Kearny, NJ $23,254,145 532 $9,565,332 761,952 115,830,480 Kelly Truck Line Pittsburg, KS $21,933,942 551 $20,267,768 N/A 349,048,302 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Builders Transport N/A 16 428 N/A $1.13 $30.33 $0.07 Mercer Transportation N/A N/A N/A N/A N/A N/A N/A Great American Lines 117,083 N/A N/A $614 $2.05 $22.76 N/A Kennedy (Louis J.) Trucking 42,092 11 152 $552 $2.27 $30.52 $0.20 Kelly Truck Line N/A 18 N/A N/A $1.16 N/A $0.06 Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Builders Transport N/A 88% 100% $3,132 Mercer Transportation N/A N/A N/A N/A Great American Lines N/A 0% 100% $29,591 Kennedy (Louis J.) Trucking N/A 57% 100% $767 Kelly Truck Line N/A 100% 100% $2,915 Table 71-- Building Materials Carriers' Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Builders Transport ($35,044,000) ($50,512,000) 112.16 (17.53%) 0% Mercer Transportation N/A N/A 94.60 N/A N/A Great American Lines $853,358 $369,300 98.81 0.51% 18% Kennedy (Louis J.) Trucking $254,319 $1,200,658 98.91 5.16% 15% Kelly Truck Line $1,293,750 ($216,094) 94.10 (0.99%) (12%) Table 72-- Building Materials Carriers' Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Seltex Pflugerville, TX $2,540,878 49 $515,199 131,560 49,795,000 Northwood Transport Kalkaska, MI $3,075,148 117 $3,514,245 49,300 7,395,000 Decato Bros. Lebanon, NH $3,424,725 78 $1,489,233 89,700 44,850,000 Jones (Dick) Trucking Powell, WY $3,850,269 110 $1,878,299 148,512 N/A Welch Trucking Portales, NM $3,898,582 51 $1,711,816 81,972 75,716,993 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Seltex 5,720 23 379 $444 $1.17 $19.31 $0.05 Northwood Transport 986 N/A 150 N/A N/A $62.38 $0.42 Decato Bros. 4,485 15 500 $764 $1.15 $38.18 $0.08 Jones (Dick) Trucking 5,712 N/A N/A $674 $1.34 $25.93 N/A Welch Trucking 3,224 24 924 N/A $1.22 $47.56 $0.05 Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Seltex N/A 13% 15% $1,600 Northwood Transport 67% 100% 100% $1,405 Decato Bros. N/A 44% 48% $514 Jones (Dick) Trucking N/A 84% 93% $3,126 Welch Trucking N/A 83% 89% N/A Table 73-- Building Materials Carriers' Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Seltex ($100,497) ($92,316) 103.96 (3.63%) N/A Northwood Transport ($106,593) $27,246 103.47 0.89% 0.82% Decato Bros. $91,547 $70,631 97.33 2.06% N/A Jones (Dick) Trucking ($92,101) $15,765 102.39 0.41% 0.90% Welch Trucking $229,058 $217,632 94.12 5.58% 14.65% Summary Charts and Graphs for Building Materials Carriers Summary Data for Building Materials Carriers Building Materials Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 31 2,540,878 290,000,000 24,000,000 58,000,000 Expenses 31 2,641,375 320,000,000 24,000,000 63,000,000 Operating Income 30 (35,000,000) 2,127,206 (846,565) 6,483,578 Net Income 30 (51,000,000) 1,201,000 (1,531,805) 9,255,851 Total Assets 29 435,100 210,000,000 11,000,000 38,000,000 Total Liabilities 29 133,127 250,000,000 11,000,000 47,000,000 Total Equity 29 (44,000,000) 7,969,000 (106,186) 8,536,171 Operating Ratio 31 74 112 97 7 Net Profit Margin 30 -18% 12% 97% 5% Return on Equity 27 -30% 113% 15% 28% Individual Expense Items Drivers and Helpers Wages 21 89,200 77,000,000 4,860,657 16,000,000 Insurance 29 13,200 24,506,000 1,167,167 4,503,385 Outside Vehicle Maintenance 25 16,448 13,138,307 1,147,593 3,025,780 Purchased Transportation 31 - 24,000,000 2,001,665 4,484,556 Fleet Composition (Items as a percent of total) Trucks Owned 29 0% 100% 48% 44% Trucks Leased 29 0% 100% 52% 44% Tractors Owned 29 0% 100% 58% 43% Tractors Leased 29 0% 100% 42% 43% Trailers Owned 29 0% 100% 77% 37% Trailers Leased 29 0% 100% 23% 37% Operating Statistics Total Units in Fleet 30 39 7,144 434 1,279 Total Highway Miles 25 147,900 250,000,000 17,000,000 50,000,000 Total Tons Carried 20 37,934 9,491,000 1,055,746 2,221,393 Total Ton-Miles 17 7,395,000 4,100,000,000 340,000,000 960,000,000 Total Shipments 19 986 117,083 19,551 27,272 Revenue per Mile 23 $0.94 $2.27 $1.33 $0.32 Revenue per Ton 18 $1.68 $62.38 $28.18 $14.49 Revenue per Shipment 17 $104.35 $943.86 $571.36 $198.51 Revenue per Ton-Mile 17 $0.04 $0.42 $0.11 $0.09 Average Load (Tons) 16 11 27 19 5 Average Haul (Miles) 15 20 1,807 443 439 Outside Vehicle Maintenance per Truck/Tractor 25 514 29,591 5,359 5,883 Valid N (listwise) 1 XII. HEAVY EQUIPMENT CARRIERS Overview of Carriers Heavy equipment carriers transport commodities, which because of size, shape, form or weight require use of special equipment. A total of 22 firms in the Heavy Equipment industry segment reported $305.9 Million in annual revenues for 1997 (Table 74). The revenues for the five largest firms account for 36.6% of all the segment's revenues. The largest firm in this segment, Belger Cartage Service, generated 9.4% of the segment's total revenue. The five largest firms in this industry segment account for 31.6% of the segment's total assets and 39.6% of the total units in the segment's fleet (Table 78). The information summarized above suggests that there is a high level of competition in this industry segment. However, this has not been an obstacle to carriers' generating positive profit margins. The largest firm in the industry segment reported a net income of $1.1 Million, resulting in a net profit margin of 3.9%. (Table 79). In addition, two of the five smallest firms in the industry segment obtained a positive profit margin, with one, Wilhelm Warehouse, reaching a net profit margin of 14.6% (Table 81). Overall, the average net profit margin for firms in the industry was 4%. In addition, the average return on equity was 20.4% (Table 75). The five firms with the highest return on equity ratios had an average of 43% (Table 77). This indicates that these firms were about 2 times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are more than 2 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the industry is $111.9 Million (Table 78), while the total revenue of the 5 most profitable firms is $51.9 Million (Table 76). Thus, carriers in this industry segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this segment handled on average 9,650 shipments and 240.3 Thousand tons of freight and produced 7.9 Million ton-miles on average. Their average load was 13.4 tons and their average length of haul was 197 miles (Tables 74 and 75). Among the five largest carriers, Ace-Doran Hauling & Rigging, generated approximately five times the average tons carried by firms in the segment (Table 76). On average, carriers in this segment owned 98% of their trucks; 83% of their tractors; and 99% of their trailers (Table 74). Among the five largest carriers in this segment, operating strategy favored company ownership of equipment. Four of the five largest companies owned no less than 95% of their trucks, tractors, and trailers, respectively. Only Davenport Mammoet Heavy Transportation selected an alternative strategy with only 55% of its tractors being company-owned. (Table 78). Among the five most profitable firms in the segment, there is a scarcity of reported information about tons carried, ton-miles generated, shipments handled, average loads, and average lengths of haul. The available information shows that several of the most profitable firms, Dawn trucking and Pelican Transportation, handled significantly less tons of freight than the reported average tons for firms in this segment. In fact, Pelican Transportation handled only 13,252 tons of freight, which is 18 times below the average for firms in this segment. This again confirms the finding that firm profitability and size are not strongly related in this segment. (Table 76). Four of the five most profitable firms relied almost exclusively on company-owned equipment to handle their truck, tractor, and trailer operations. Only one firm, Pelican Transportation, reported that it did not own any of its tractors (Table 76). There is variation among the five smallest companies in their reliance on company drivers with company-owned equipment and owner-operators. Among the five smallest companies, three rely exclusively on company drivers. Two carriers, Argee Transport and Terrell Trucking, use a mixed strategy, with a 63% and 60% level of tractor ownership achieved, respectively. (Table 80). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this segment, the average operating ratio is 100.17 (Table 75). This indicates that on average firms in this segment spend more on their transportation operations than they accumulate in revenues from transportation operations. Among the five most profitable firms (Table 77), based on return on equity, operating ratio ranged from a low of 72% (Swifty Transportation) to a high of 104.9% (Pradon Construction & Trucking). Among the five largest carriers (Table 79), the largest, Belger Cartage Service, had an operating ratio of 91.3 - the lowest operating ratio achieved by any of the largest firms. The four remaining firms in the group of the segment's largest carriers had operating ratios ranging from 92.7 to 98.8. Among the five smallest carriers (Table 81), four had operating ratios in excess of 100 and the firm with the lowest operating ratio still had a ratio of 97.2%. Clearly, the smallest carriers in this segment achieved very poor operating performance. In fact, their negative operating performance indicates the marginal nature of their transportation operations. This contrasts sharply with the far better performance achieved by both the largest and most profitable firms in this segment. Table 74--Heavy Equipment Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 22 $305,945,584 Units in Fleet 21 3,797 Assets 20 $196,496,395 Tons Carried 13 3,124,219 Ton-Miles 12 94,927,216 Shipments 13 125,456 Average Size of Load (Tons) 4 13.44 Length of Haul (Miles) 2 197 Average Revenue Per Mile 18 $2.97 Revenue Per Ton 9 $154.79 Revenue Per Ton-Mile 4 $3.27 Average % of Trucks Owned 9 98% % of Tractors Owned 21 83% % of Trailers Owned 20 99% Outside Vehicle Maintenance per Truck/Tractor 20 $10,086 Table 75--Heavy Equipment Carriers' Average Financial Performance Operating Income $343,988 Net Income $361,758 Operating Ratio 100.17 Net Profit Margin 3.98% Return on Equity 20.37% Table 76: Heavy Equipment Carriers' Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Swifty Transportation Seymour, IN $3,729,649 24 $1,449,976 N/A N/A Dawn Trucking Farmington, NM $11,900,088 207 $5,802,011 124,530 N/A Pelican Transportation Lafayette, LA $3,870,603 44 $996,308 13,252 N/A Pradon Construction & Trucking Odessa, TX $7,214,488 176 $4,847,862 N/A N/A Robbins Motor Transportation Essington, PA $25,221,865 483 $7,015,496 N/A N/A Carrier Total Ship-ments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Swifty Transportation N/A N/A N/A N/A $1.83 N/A N/A Dawn Trucking 7,938 N/A N/A N/A $3.99 N/A N/A Pelican Transportation N/A N/A N/A $487.60 $2.16 $31.08 N/A Pradon Construction & Trucking N/A N/A N/A N/A $2.22 $544.41 N/A Robbins Motor Transportation N/A N/A N/A N/A $3.37 N/A N/A Table 76: Heavy Equipment Carriers' Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Swifty Transportation N/A 100% 100% $26,573 Dawn Trucking 83% 92% 100% $17,227 Pelican Transportation N/A 0% N/A N/A Pradon Construction & Trucking N/A 100% 100% $15,411 Robbins Motor Transportation N/A 100% 100% $1,985 Table 77--Heavy Equipment Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Swifty Transportation $1,042,796 $1,017,835 72.04 27.29% 120.24% Dawn Trucking $1,143,241 $1,143,241 90.39 9.61% 41.68% Pelican Transportation $271,075 $175,244 93.00 4.53% 20.99% Pradon Construction & Trucking -$355,054 $658,982 104.92 9.13% 17.12% Robbins Motor Transportation $683,009 $636,386 97.29 2.52% 15.26% Table 78: Heavy Equipment Carriers' Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Belger Cartage Service Kansas City, MO $28,692,593 465 $25,230,850 N/A 2,342,909 Ace-Doran Hauling & Rigging Cincinnati, OH $26,919,453 188 $8,270,912 1,194,707 N/A Robbins Motor Transportation Essington, PA $25,221,865 483 $7,015,496 N/A N/A Keep on Trucking Co. Rancho Cucamonga, CA $16,690,559 279 $6,959,154 N/A 69,544,000 Davenport Mammoet Hvy Transportation Rosharon, TX $14,395,784 90 $14,526,727 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Belger Cartage Service N/A 4.24 N/A N/A N/A N/A $12.25 Ace-Doran Hauling & Rigging 44,457 N/A N/A $605.52 $1.27 $22.53 N/A Robbins Motor Transportn. N/A N/A N/A N/A $3.37 N/A N/A Keep on Trucking Co. N/A 13.46 N/A N/A $3.23 N/A $0.24 Davenport Mammoet Hvy Transportn. N/A N/A N/A N/A N/A N/A N/A Table 78: Heavy Equipment Carriers' Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Belger Cartage Service 100% 95% 100% $2,071 Ace-Doran Hauling & Rigging 100% 100% 100% $7,225 Robbins Motor Transportation N/A 100% 100% $1,985 Keep on Trucking Co. N/A 100% 100% $2,681 Davenport Mammoet Hvy Transportation N/A 55% 100% $4,557 Table 79--Heavy Equipment Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Belger Cartage Service $2,491,292 $1,119,816 91.32 3.90% 11.43% Ace-Doran Hauling & Rigging $333,271 $250,713 98.76 0.93% 4.37% Robbins Motor Transportation $683,009 $636,386 97.29 2.52% 15.26% Keep on Trucking Co. $216,852 $65,461 98.70 0.39% 2.15% Davenport Mammoet Hvy Transportation $1,050,660 $913,600 92.70 6.35% 12.89% Table 80: Heavy Equipment Carriers' Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Argee Transport Audubon, IA $2,879,797 89 $1,519,934 N/A N/A Terrell (Dan), Trucking Mooresville, IN $3,077,043 78 N/A N/A N/A Wilhelm (Rudie) Warehouse Portland, OR $3,257,731 221 $13,132,228 39,844 8,469,711 Bragg Investment Co. Long Beach, CA $3,278,270 264 $76,332,652 7,800 N/A Interstate Heavy Hauling Portland, OR $3,325,274 137 $2,939,584 79,923 14,570,596 Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Argee Transport 30 N/A N/A N/A $0.19 N/A N/A Terrell (Dan), Trucking N/A N/A N/A N/A $1.33 N/A N/A Wilhelm (Rudie) Warehouse N/A 14.88 213 N/A $5.72 $81.76 $0.38 Bragg Investment Co. 300 N/A N/A N/A $7.76 $420.29 N/A Interstate Heavy Hauling 3,447 21.17 182 $964.69 $4.83 $41.61 $0.23 Table 80: Heavy Equipment Carriers' Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Argee Transport N/A 63% 87% $7,976 Terrell (Dan), Trucking 100% 60% 100% $4,999 Wilhelm (Rudie) Warehouse 100% 100% 100% $4,092 Bragg Investment Co. 100% 100% 100% $6,204 Interstate Heavy Hauling 100% 100% 100% $6,211 Table 81--Heavy Equipment Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Argee Transport $79,375 -$206,934 97.24 -7.19% -26.50% Terrell (Dan), Trucking -$43,143 -$43,143 101.40 -1.40% N/A Wilhelm (Rudie) Warehouse -$119,473 $476,046 103.67 14.61% 4.16% Bragg Investment Co. -$2,299,091 $31,747 170.13 0.97% 0.08% Interstate Heavy Hauling -$41,394 $3 101.24 0% 0% Summary Charts and Graphs for Heavy Equipment Carriers Summary Data for Heavy Equipment Carriers Heavy Equipment Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 22 2,879,797 99,598,000 13,906,617 21,000,000 Expenses 22 2,686,853 98,303,000 13,519,402 20,000,000 Operating Income 21 (2,299,091) 2,630,629 343,988 1,180,078 Net Income 21 (535,242) 1,585,655 361,758 535,451 Total Assets 20 996,308 76,332,652 9,824,820 17,000,000 Total Liabilities 20 161,339 36,523,974 4,723,204 8,317,163 Total Equity 20 (530,242) 39,808,678 5,101,615 8,740,920 Operating Ratio 22 61 170 100 23 Net Profit Margin 21 -7% 27% 4% 8% Return on Equity 20 -27% 120% 20% 35% Individual Expense Items Drivers and Helpers Wages 16 - 3,191,796 1,036,382 1,055,455 Insurance 21 - 895,959 293,540 222,357 Outside Vehicle Maintenance 20 58,289 1,515,959 430,888 419,423 Purchased Transportation 16 (191,467) 5,118,299 940,107 1,400,764 Fleet Composition (Items as a percent of total) Trucks Owned 9 83% 100% 98% 6% Trucks Leased 9 0% 17% 2% 6% Tractors Owned 21 0% 100% 83% 31% Tractors Leased 21 0% 100% 17% 31% Trailers Owned 20 87% 100% 99% 3% Trailers Leased 20 0% 13% 1% 3% Operating Statistics Total Units in Fleet 21 24 483 181 124 Total Highway Miles 21 - 21,267,411 4,119,469 5,360,984 Total Tons Carried 13 - 1,517,850 240,325 501,291 Total Ton-Miles 12 - 69,544,000 7,910,601 20,000,000 Total Shipments 13 - 56,321 9,650 18,462 Revenue per Mile 18 $0.19 $7.76 $2.97 $1.92 Revenue per Ton 9 $7.34 $544.41 $154.79 $193.02 Revenue per Shipment 5 $197.79 $1,185.90 $688.30 $391.07 Revenue per Ton-Mile 4 $0.23 $12.25 $3.27 $5.98 Average Load (Tons) 4 4 21 13 7 Average Haul (Miles) 2 182 213 197 21 Outside Vehicle Maintenance per Truck/Tractor 20 1,575 34,913 10,086 9,293 Valid N (listwise) 1 XIII. OTHER SMALL CARRIERS Overview of Carriers The Other Specialize Commodity segment includes carriers, which transport products not included in the other categories mentioned earlier. Some products which fit into this category include automobile haulers, livestock haulers and armored truck service. A total of 235 firms in the Other Specialized Commodities (Truckload) industry segment reported $4.35 Billion in annual revenues for 1997 (Table 82). This segment includes firms handling a wide variety of different types of commodities in non-van trailers. Dividing this segment into three groups, based on total revenues, we find that the small-sized tier of the carriers generates $318 Million in revenues. This subtotal accounts for 7.3% of the total revenues in the Other Specialized Commodities industry segment. The remainder of this section focuses on the small-sized Other Specialized Commodities firm tier. The revenues for the five largest firms in this sub segment account for 8.7% of the sub segment's total revenue. The largest firm in this sub segment, Tripp Brothers Trucking, generated 1.8% of the segment's total revenue. The five largest firms in this industry sub segment account for 5.1% of the sub segment's total assets and 10.2% of the sub segment's total units in the fleet (Table 86). The information summarized above suggests that there is a low level of concentration in this industry segment. Despite this high level of disaggregation, four of the five largest firms in the sub segment reported positive net incomes. The average net income among the five largest firms is $101,000, resulting in an average net profit margin of 1.8% (Table 87). In contrast only one of the five smallest carriers in the sub segment reported positive net profit margins. This information is in line with the highly competitive conditions outlined above (Table 89). Overall, the average net profit margin for firms in this sub segment was 3.3%. In addition, the average return on equity was 20.7% (Table 83). The five firms with the highest return on equity ratios had an average of 110.1% (Table 85). This indicates that these firms were about 5 times more effective in returning value to their shareholders with respect to the average firm in this industry sub segment. These firms are 1.3 times smaller than the five largest firms in the sub segment. Indeed, the total revenue of the 5 largest firms in the sub segment is $27.6 Million (Table 86), while the total revenue of the 5 most profitable firms is $21.2 Million (Table 84). Thus, carriers in this industry sub segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this sub segment handled on average 74,462 shipments and 230,700 tons of freight and produced 12.3 Million ton-miles on average. Their average load was13.8 tons and 20 firms reported an average length of haul of 344 miles (Tables 82 and 84). Four of the five largest carriers in the sub segment reported information about the amount of tons produced. On average, these carriers generated more than 6 times the average number of tons carried in this industry sub segment (Table 84). On average, carriers in this sub segment owned 83% of their trucks; 62% of their tractors; and 78% of their trailers (Table 82). Four of the five largest carriers in this sub segment reported tractor ownership information. Three of the four carriers owned a substantial portion of their tractors (between 73 and 100%). On the other hand, one carrier, Alpha Cargo Motor Express, owned none of its tractors (Table 86). The five most profitable firms in the sub segment reported information about their tractor ownership. No firm owned 100% of its tractors, although two firms owned a substantial amount of their tractors (52 and 73%, respectively). On the other hand, the other three firms owned only up to 48% of their tractors. This suggests a mixed strategy with an emphasis on neither company drivers nor owner operators, with Alpha Cargo Motor Express being the exception with none of its tractors or trailers being company-owned (Table 84). There is no variation among the smallest companies in the sub segment in their vehicle ownership patterns. All the firms in this sub segment report total vehicle ownership (Table 88). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this sub segment, the average operating ratio is 96.8% (Table 83). Among the five most profitable firms in the sub segment (Table 85), based on return on equity, operating ratio ranged from a low of 78.1% (Best Way Transportation) to a high of 194.1% (Alpha Cargo Motor Express). On average, the five most profitable firms in the sub segment reported an operating ratio of 85.4%. Among the five largest carriers (Table 87), the largest, Tripp Brothers Trucking, had an operating ratio of 82.6%, the lowest among all the largest firms in this sub segment. On average, the five largest firms in the sub segment reported an operating ratio of 95%. On the other hand, three of the five smallest carriers reporting operating ratios (Table 89) had operating ratios above 100. The other two firms had operating rations below 100. The firm with the lowest operating ratio, Musslewhite Trucking, had a ratio of 93.8 percent. On average, the five smallest firms in the sub segment reported an average operating ratio of 114.5%. The smallest firms in the small-sized segment of the Other Specialized Commodities industry seem to have poorer operating performance in comparison with the other firms in the industry. Table 82--Other Specialized (Truckload) Small-Sized Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 76 $318,128,966 Units in Fleet 76 7,346 Assets 75 $162,536,033 Tons Carried 50 11,534,123 Ton-Miles 52 640,920,839 Shipments 53 3,946,499 Average Size of Load (Tons) 21 13.80 Length of Haul (Miles) 20 344 Average Revenue Per Mile 60 $2.55 Revenue Per Ton 39 $64.53 Revenue Per Ton-Mile 20 $0.25 Average % of Trucks Owned 32 83% % of Tractors Owned 65 62% % of Trailers Owned 68 78% Outside Vehicle Maintenance per Truck/Tractor 63 $6,010 Table 83--Other Specialized (Truckload) Small-Sized Carriers' Average Financial Performance Operating Income $180,620 Net Income $108,598 Operating Ratio 96.83 Net Profit Margin 3.26% Return on Equity 20.65% Table 84--Other Specialized (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Firms Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Alpha Cargo Motor Express Fort Worth, TX $5,589,731 96 $329,023 378,597 50,484,023 D.W. Trucking Ellinwood, KS $3,840,435 95 $3,822,632 191,100 N/A West Express Trucking Co. Owensboro, KY $2,916,953 66 $907,472 240,000 N/A Admiral Transport Corp. Worland, WY $4,468,951 99 $1,424,907 306,658 N/A Best Way Transportation Palmer, TX $4,409,847 91 $874,856 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Alpha Cargo Motor Express 17,517 14.01 133 $319.10 $1.55 $14.76 $0.11 D.W. Trucking 7,644 N/A N/A $502.41 $1.32 $20.10 N/A West Express Trucking Co. 5,621 N/A N/A $518.94 $1.41 $12.15 N/A Admiral Transport Corp. 10,336 N/A N/A $432.37 $1.69 $14.57 N/A Best Way Transportn. N/A N/A N/A N/A N/A N/A N/A Table 84--Other Specialized (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Firms (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Alpha Cargo Motor Express N/A 0% 0% N/A D.W. Trucking 0% 73% 90% $1,765 West Express Trucking Co. N/A 52% 65% $340 Admiral Transport Corp. N/A 48% 96% $7,220 Best Way Transportation N/A 17% 60% $12,296 Table 85--Other Specialized (Truckload) Small-Sized Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Alpha Cargo Motor Express $331,079 $205,419 94.08 3.67% 269.38% D.W. Trucking $531,172 $479,035 86.17 12.47% 82.73% West Express Trucking Co. $355,459 $307,358 87.81 10.54% 72.32% Admiral Transport Corp. $860,934 $853,151 80.74 19.09% 69.02% Best Way Transportation $966,478 $448,122 78.08 10.16% 57.34% Table 86--Other Specialized (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Tripp Brothers Trucking Missoula, MT $5,593,547 98 $3,675,286 72,716 N/A Alpha Cargo Motor Express Fort Worth, TX $5,589,731 96 $329,023 378,597 50,484,023 Rollin Johnson Trucking Stockertown, PA $5,568,424 131 $2,173,888 388,596 N/A Hoagland Transport Svcs. Modesto, CA $5,448,972 360 $1,028,024 N/A N/A N & N Trucking Belk, AL $5,447,957 63 $1,107,691 4,987,276 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Tripp Brothers Trucking 3,636 N/A N/A $1,538.38 $1.01 $76.92 N/A Alpha Cargo Motor Express 17,517 14.01 133 $319.10 $1.55 $14.76 $0.11 Rollin Johnson Trucking 14,946 N/A N/A $372.57 $1.57 $14.33 N/A Hoagland Transport Svcs. 21,762 N/A N/A $250.39 $1.88 N/A N/A N & N Trucking 21,552 N/A N/A $252.78 $1.11 $1.09 N/A Table 86--Other Specialized (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Tripp Brothers Trucking N/A 100% 100% $5,627 Alpha Cargo Motor Express N/A 0% 0% N/A Rollin Johnson Trucking N/A 87% 99% $6,126 Hoagland Transport Svcs. 100% N/A 100% $193 N & N Trucking N/A 73% 76% $3,109 Table 87--Other Specialized (Truckload) Small-Sized Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Tripp Brothers Trucking $971,613 $270,361 82.63 4.83% 49.61% Alpha Cargo Motor Express $331,079 $205,419 94.08 3.67% 269.38% Rollin Johnson Trucking $127,219 $69,774 97.72 1.25% 9.38% Hoagland Transport Svcs. -$25,037 $8,383 100.46 0.15% 0.88% N & N Trucking $2,198 -$48,836 99.96 -0.90% N/A Table 88--Other Specialized (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles McWaters Trucking Cleveland, TX $703,632 8 $268,027 51,935 N/A Musslewhite Trucking Levelland, TX $1,742,226 110 $4,316,548 18,100 2,901,000 Coolidge Grain & Produce Houston, TX $2,173,927 50 $1,488,919 36,000 N/A Asphalt Products Transportation Tucson, AZ $2,743,686 69 $698,880 63,914 7,460,369 Dillard Trucking Byron, CA $2,869,799 43 $668,229 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile McWaters Trucking 2,350 N/A N/A $299.42 $1.99 $13.55 N/A Musslewhite Trucking 1,300 2.54 160 $1,340.17 $1.53 $96.26 $0.60 Coolidge Grain & Produce 800 N/A N/A N/A $0.91 $60.39 N/A Asphalt Products Transportation 3,364 9.96 117 $815.60 $3.66 $42.93 $0.37 Dillard Trucking N/A N/A N/A N/A $3.66 N/A N/A Table 88--Other Specialized (Truckload) Small-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor McWaters Trucking 100% N/A 100% $26,782 Musslewhite Trucking 100% N/A 100% $866 Coolidge Grain & Produce N/A 100% 100% $2,899 Asphalt Products Transportation 100% 100% 100% $1,056 Dillard Trucking 100% 100% 100% $11,116 Table 89--Other Specialized (Truckload) Small-Sized Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity McWaters Trucking -$368,152 -$1,703,050 152.32 N/A N/A Musslewhite Trucking $108,176 $678,362 93.79 38.94% 16.02% Coolidge Grain & Produce -$405,675 -$48,305 118.66 -2.22% -3.53% Asphalt Products Transportation $45,027 -$103,380 98.36 -3.77% -30.04% Dillard Trucking -$266,244 -$120,009 109.28 -4.18% -38.92% Summary Charts and Graphs for Other Small Carriers Summary Data for Other Small Carriers Other Small Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 76 34,902 5,593,547 4,185,907 1,086,238 Expenses 76 - 5,474,009 4,005,300 1,023,246 Operating Income 76 (973,699) 1,638,670 180,620 380,572 Net Income 76 (1,703,050) 853,151 108,598 319,459 Total Assets 75 147,627 22,701,420 2,167,147 2,853,048 Total Liabilities 75 12,600 19,754,040 1,076,416 2,401,053 Total Equity 75 (2,975,206) 7,723,342 1,090,718 1,494,430 Operating Ratio 75 67 152 97 11 Net Profit Margin 74 -12% 39% 3% 7% Return on Equity 72 -39% 282% 21% 49% Individual Expense Items Drivers and Helpers Wages 76 - 61,846,553 1,505,107 7,042,965 Insurance 73 18,303 529,559 168,903 111,583 Outside Vehicle Maintenance 65 (1,853) 792,772 176,517 178,482 Purchased Transportation 76 - 5,034,044 732,391 959,340 Fleet Composition (Items as a percent of total) Trucks Owned 32 0% 100% 83% 36% Trucks Leased 31 0% 100% 14% 33% Tractors Owned 65 0% 100% 62% 42% Tractors Leased 65 0% 100% 38% 42% Trailers Owned 68 0% 100% 78% 36% Trailers Leased 68 0% 100% 22% 36% Operating Statistics Total Units in Fleet 76 - 438 97 68 Total Highway Miles 69 - 170,189,000 4,455,073 20,292,058 Total Tons Carried 50 - 4,987,276 230,682 698,270 Total Ton-Miles 52 - 95,375,750 12,325,401 21,449,129 Total Shipments 53 - 2,500,000 74,462 356,683 Revenue per Mile 60 $0.02 $11.45 $2.55 $2.39 Revenue per Ton 39 $1.09 $379.22 $64.53 $98.19 Revenue per Shipment 48 $2.05 $2,000.31 $510.64 $406.73 Revenue per Ton-Mile 20 $0.05 $1.14 $0.25 $0.26 Average Load (Tons) 21 1 25 14 7 Average Haul (Miles) 20 20 2,257 344 488 Outside Vehicle Maintenance per Truck/Tractor 63 (39) 26,782 6,010 6,176 Valid N (listwise) 3 XIV. OTHER MEDIUM SIZED CARRIERS Overview of Carriers A total of 235 firms in the Other Specialized Commodities (Truckload) industry segment reported $4.35 Billion in annual revenues for 1997 (Table 90). This segment includes firms handling a wide variety of different types of commodities in non-van trailers. Dividing this segment into three groups, based on total revenues, we find that the middle third of the carriers generates $638 Million in revenues. This subtotal accounts for 14.7% of the total revenues in the Other Specialized Commodities industry segment. The remainder of this section focuses on the medium-sized Other Specialized Commodities firm tier. The revenues for the five largest firms in this sub segment account for 8.2% of the sub segment's total revenue. The largest firm in this sub segment, Rex "N" Don Van Lines, generated 1.7% of the segment's total revenue. The five largest firms in this industry sub segment account for 1.9% of the sub segment's total assets and 12.3% of the total units in the segment's fleet (Table 94). The information summarized above suggests that there is a low level of concentration in this industry segment. In fact, across all firms in this sub segment, annual revenues varied from a minimum of $5.7 Million to $10.9 Million. Despite this high level of disaggregation, the five largest firms in the sub segment reported positive net incomes. The average net income among these four firms is $359,823, resulting in an average net profit margin of 3.4% (Table 95). In addition, the five smallest carriers in the sub segment reported positive net profit margins. The highest profit margin among the five smallest firms in the sub segment was 6.28% (Table 97). Overall, the average net profit margin for firms in this sub segment was 2.9%. In addition, the average return on equity was 19.9% (Table 91). The five firms with the highest return on equity ratios had an average of 117.7% (Table 93). This indicates that these firms were almost 6 times more effective in returning value to their shareholders with respect to the average firm in this industry sub segment. These firms are 1.14 times smaller than the five largest firms in the sub segment. Indeed, the total revenue of the 5 largest firms in the sub segment is $52.6 Million (Table 94), while the total revenue of the 5 most profitable firms is $46.2 Million (Table 92). Thus, carriers in this industry sub segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this sub segment handled on average 23,143 shipments and 539,186 tons of freight and produced 25 Million ton-miles on average. Their average load was 14 tons and 20 firms reported an average length of haul of 251 miles (Tables 90 and 91). Among the five largest carriers in the sub segment, Summers, generated approximately 2.5 times the average ton-miles carried by firms in the sub segment. On average, carriers in this sub segment owned 87% of their trucks; 56% of their tractors; and 73% of their trailers (Table 90). Four of the five largest carriers in this sub segment reported tractor ownership information. Three carriers, Rex "N" Don Van Lines, Coin Depot Corporation, and Summers, owned 100% of their tractors, while another carrier, Thom's Transport, owned 65% of its tractors (Table 94). Thus, it appears that large firms in this sub segment have a heavy reliance on their own tractors. Four of the five most profitable firms in the sub segment varied widely in their tractor ownership patterns. Two firms owned 100% of their tractors (Plainfield Trucking and J&S), while a third firm, Baker Truck Lines, owned 83% of its tractors. In contrast, Packard Truck Lines, owned none of its tractors. This suggests that a wide variety of tractor ownership strategies are being employed successfully in this sub segment. (Table 92). Furthermore, there is variation among four of the five smallest companies in the sub segment in their truck-tractor ownership patterns. Two of the four smallest firms in the sub segment reporting tractor ownership relied on 80% or more of their own company drivers. A third firm, Leoni Motor Express, relied on 64% of their own tractors. In contrast, Dennis Truck Lines owned none of its tractors (Table 96). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this sub segment, the average operating ratio is 96% (Table 91). Among the five most profitable firms in the sub segment (Table 93), based on return on equity, operating ratio ranged from a low of 81.9% (J&S) to a high of 97.8% (American Motor Line). Among the five largest carriers (Table 95), the largest, Rex "N" Don Van Lines, had an operating ratio of 97.8%. Among this group of carriers, the one with the lowest operating ratio (Coin Depot Corporation) had a ratio of 76.2%. The five smallest carriers in the sub segment (Table 97) had operating ratios below 100% and the firm with the lowest operating ratio had a ratio of 81.6% (Leoni Motor Express). Clearly, firms in this sub segment of other specialized commodities had a strong operating performance regardless of their operating size. Table 90--Other Specialized (Truckload) Medium-Sized Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 82 $638,069,008 Units in Fleet 78 13,442 Assets 81 $248,544,549 Tons Carried 49 26,420,126 Ton-Miles 58 1,450,876,016 Shipments 50 1,157,135 Average Size of Load (Tons) 21 13.92 Length of Haul (Miles) 20 251 Average Revenue Per Mile 66 $1.84 Revenue Per Ton 44 $24.74 Revenue Per Ton-Mile 22 $0.22 Average % of Trucks Owned 21 87% % of Tractors Owned 72 56% % of Trailers Owned 69 73% Outside Vehicle Maintenance per Truck/Tractor 67 $6,358 Table 91--Other Specialized (Truckload) Medium-Sized Carriers' Average Financial Performance Operating Income $327,288 Net Income $233,830 Operating Ratio 95.95 Net Profit Margin 2.86% Return on Equity 19.87% Table 92--Other Specialized (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Plainfield Trucking Plainfield, WI $9,641,597 468 $2,379,607 719,393 89,907,523 Packard Truck Lines Harvey, LA $8,287,735 157 $1,421,538 123,530 N/A American Motor Line Wayne, MI $9,820,357 N/A $823,074 N/A N/A Baker Truck Lines Lewiston, ID $9,845,715 209 $5,025,751 606,480 81,875,696 J & S Indianola, PA $8,559,167 156 $2,628,877 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Plainfield Trucking 31,973 12.70 125 $301.55 $1.36 $13.40 $0.11 Packard Truck Lines 15,600 N/A N/A $531.27 $1.58 $67.09 N/A American Motor Line N/A N/A N/A N/A N/A N/A N/A Baker Truck Lines 21,660 14.00 135 $454.56 $1.68 $16.23 $0.12 J & S N/A N/A N/A N/A $5.79 N/A N/A Table 92--Other Specialized (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Plainfield Trucking N/A 100% 100% $11,603 Packard Truck Lines N/A 0% 0% $184 American Motor Line N/A N/A N/A N/A Baker Truck Lines N/A 83% 100% $11,351 J & S N/A 100% 100% $5,858 Table 93--Other Specialized (Truckload) Medium-Sized Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Plainfield Trucking $670,882 $578,038 93.04 6.00% 182.31% Packard Truck Lines $694,323 $657,051 91.62 7.93% 129.37% American Motor Line $219,539 $201,524 97.76 2.05% 104.82% Baker Truck Lines $1,517,325 $1,467,020 84.59 14.90% 100.86% J & S $1,546,699 $1,166,906 81.93 13.63% 71.50% Table 94--Other Specialized (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Rex "N" Don Van Lines Charleston, IL $10,856,667 N/A $2,638,159 N/A N/A Anderson Armored Car Service Anderson, SC $10,637,579 N/A $4,360,054 N/A N/A Coin Depot Corp. Elizabeth, NJ $10,479,408 70 $13,622,119 N/A N/A Summers (Lester R.) Ephrata, PA $10,409,947 272 $5,990,194 N/A 61,529,439 Thom's Transport Co. Blackshear, GA $10,252,189 274 $3,995,909 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Rex "N" Don Van Lines N/A N/A N/A N/A N/A N/A N/A Anderson Armored Car Service N/A N/A N/A N/A $1.09 N/A N/A Coin Depot Corp. N/A N/A N/A N/A $6.95 N/A N/A Summers (Lester R.) 31,850 11.49 N/A $326.84 $1.94 N/A $0.17 Thom's Transport Co. N/A N/A N/A N/A $1.06 N/A N/A Table 94--Other Specialized (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Rex "N" Don Van Lines N/A 100% N/A $7,155 Anderson Armored Car Service N/A N/A N/A N/A Coin Depot Corp. 100% 100% 100% $316 Summers (Lester R.) N/A 100% 100% $2,469 Thom's Transport Co. N/A 65% 98% N/A Table 95--Other Specialized (Truckload) Medium-Sized Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Rex "N" Don Van Lines $236,722 $265,946 97.82 2.45% 13.80% Anderson Armored Car Service $618,805 $183,836 94.18 1.73% 7.67% Coin Depot Corp. $2,488,611 $680,468 76.25 6.49% 9.31% Summers (Lester R.) $893,568 $480,286 91.42 4.61% 16.91% Thom's Transport Co. $422,325 $188,583 95.88 1.84% 45.09% Table 96--Other Specialized (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Dennis Truck Lines Vidalia, GA $5,709,808 150 $1,483,587 429,949 N/A Cowley Elizabethtown, KY $5,713,748 177 $1,766,393 700,000 N/A Echo Trucking Company Benson, AZ $5,722,221 42 $2,242,014 N/A N/A Leoni Motor Express Chicago Heights, IL $5,748,380 115 $1,055,727 212,588 N/A Rouse Motor Express Canaan, NY $5,762,619 101 $1,783,137 310,000 N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Dennis Truck Lines N/A N/A N/A N/A $1.08 $13.28 N/A Cowley 24,836 N/A N/A $230.06 $0.97 $8.16 N/A Echo Trucking Company N/A N/A N/A N/A $1.53 N/A N/A Leoni Motor Express 19,780 N/A N/A $290.62 $3.25 $27.04 N/A Rouse Motor Express 12,400 N/A N/A $464.73 $1.65 $18.59 N/A Table 96--Other Specialized (Truckload) Medium-Sized Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Dennis Truck Lines N/A 0% 0% N/A Cowley 100% 80% 100% $10,236 Echo Trucking Company 100% N/A N/A N/A Leoni Motor Express 100% 64% 100% $2,010 Rouse Motor Express N/A 97% 69% $755 Table 97--Other Specialized (Truckload) Medium-Sized Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Dennis Truck Lines $115,083 $39,460 97.98 0.69% 3.14% Cowley $399,539 $359,103 93.01 6.28% 23.10% Echo Trucking Company $21,868 $38,575 99.62 0.67% 2.30% Leoni Motor Express $1,058,281 $107,113 81.59 1.86% N/A Rouse Motor Express $233,040 $77,424 95.96 1.34% 28.04% Summary Charts and Graphs for Other Medium Sized Carriers Summary Data for Other Medium-Sized Carriers Other Mid-Size Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 82 5,709,808 10,856,667 7,781,329 1,483,400 Expenses 82 4,690,099 10,619,945 7,454,041 1,437,756 Operating Income 82 (809,633) 2,488,611 327,288 520,966 Net Income 81 (798,784) 1,467,020 233,830 372,105 Total Assets 81 509,201 13,622,119 3,068,451 2,179,363 Total Liabilities 81 (358,860) 6,561,489 1,512,144 1,312,998 Total Equity 80 (983,846) 7,311,759 1,533,502 1,600,416 Operating Ratio 82 76 109 96 6 Net Profit Margin 81 9% 15% 3% 4% Return on Equity 77 79% 182% 20% 38% Individual Expense Items Drivers and Helpers Wages 79 - 3,614,851 1,242,556 993,952 Insurance 80 19,785 1,022,283 242,708 157,895 Outside Vehicle Maintenance 71 - 1,055,915 268,701 272,951 Purchased Transportation 79 - 8,376,311 1,799,970 1,983,970 Fleet Composition (Items as a percent of total) Trucks Owned 21 0% 100% 87% 28% Trucks Leased 21 0% 100% 13% 28% Tractors Owned 72 0% 100% 56% 41% Tractors Leased 72 0% 100% 44% 41% Trailers Owned 69 0% 100% 73% 39% Trailers Leased 69 0% 100% 27% 39% Operating Statistics Total Units in Fleet 78 - 756 172 123 Total Highway Miles 75 - 11,190,088 4,360,987 2,458,299 Total Tons Carried 49 - 2,500,000 539,186 539,849 Total Ton-Miles 58 - 123,427,081 25,015,104 36,462,969 Total Shipments 50 - 90,909 23,143 21,106 Revenue per Mile 66 $0.72 $6.95 $1.84 $1.03 Revenue per Ton 44 $2.40 $121.33 $24.74 $23.63 Revenue per Shipment 44 $65.91 $1,923.86 $506.80 $432.02 Revenue per Ton-Mile 22 $0.07 $1.91 $0.22 $0.38 Average Load (Tons) 20 38 780 251 192 Average Haul (Miles) 21 6 25 14 4 Outside Vehicle Maintenance per Truck/Tractor 67 - 65,442 6,358 9,520 Valid N (listwise) 2 XV. OTHER LARGE CARRIERS Overview of Carriers A total of 235 firms in the Other Specialized Commodities (Truckload) industry segment reported $4.35 Billion in annual revenues for 1997 (Table 98). This segment includes firms handling a wide variety of different types of commodities in non-van trailers. Dividing this segment into three groups, based on total revenues, we find that the largest third of the carriers generates $3.39 Billion in revenues. This subtotal accounts for 77.9% of the total revenues in the Other Specialized Commodities industry segment. The remainder of this section focuses on the largest Other Specialized Commodities firm tier. The revenues for the five largest firms in this sub segment account for 35.6% of the sub segment's total revenue. The largest firm in this sub segment, Trism, generated 9.1% of the segment's total revenue. Four of the five largest firms in this industry sub segment account for 33.6% of the sub segment's total assets and 25.8% of the total units in the segment's fleet (Table 101). The information summarized above suggests that there is a low level of dominance by the largest carriers in this industry sub segment. However, three of the five largest firms experienced positive profit margins with the largest of the three firms having a net income gain of $11.1 Million, resulting in a net profit margin of 3.8% (Table 103). In addition, all of the five smallest carriers in the sub segment reported positive net profit margins. The highest profit margin among the five smallest firms in the sub segment was 7.6% (Table 105). Overall, the average net profit margin for firms in this sub segment was 3.7%. In addition, the average return on equity was 24.1% (Table 99). The five firms with the highest return on equity ratios had an average of 99.1% (Table 101). This indicates that these firms were more than 4 times more effective in returning value to their shareholders with respect to the average firm in the industry. Furthermore, these firms are almost 14 times smaller than the five largest firms in the industry. Indeed, the total revenue of the 5 largest firms in the sub segment is $1.2 Billion (Table 102), while the total revenue of the 5 most profitable firms is $88.7 Million (Table 100). Thus, carriers in this industry sub segment do not necessarily enjoy profitability advantages associated with the size of their operations. Carriers in this sub segment handled on average 19,071 shipments and 333,485 tons of freight and produced 208 Million ton-miles on average. Their average load was11.5 tons. Only 14 firms in the sub segment reported an average length of haul of 330 miles (Tables 98 and 99). Among the five largest carriers, Trism, generated approximately seven times the average ton-miles carried by firms in the sub segment (Table 100). On average, carriers in this sub segment owned 60% of their trucks; 52% of their tractors; and 91% of their trailers (Table 98). Four of the five largest carriers in this sub segment reported tractor ownership information. Two carriers, Allied Systems and Cassens Transport, owned 100% of their tractors, while one other carrier, Trism, owned 53% of its tractors. In contrast, Customized Transportation, owned 2% of its tractors (Table 102). Based on reported information by four of the five most profitable firms in the sub segment, there is almost exclusively company ownership of equipment. The only deviation from this pattern is Trailer Transit, who owns none of its tractors. This suggests that an all company driver strategy could be a key factor in devising a profitable business approach (Table 100). In contrast, there is variation in tractor ownership patterns among the five smallest companies in the sub segment. Two of these carriers (Forbes Transfer Co. and Clark Transfer) own all of their tractors, while two other own a significant portion. Indeed, Jones Feed & Grain owns 69% and Campbell & Associates owns 48%. In contrast, Roeder Cartage Company owns none of its tractors (Table 104). One important performance dimension in the transportation sector is firm operating ratio, which compares operating expenses to operating revenues. Among all firms in this sub segment, the average operating ratio is 94.8% (Table 99). Among the five most profitable firms in the sub segment (Table 101), based on return on equity, operating ratio ranged from a low of 84.7% (Hodges Trucking) to a high of 98.3% (Armored Motor Service of America). Among the five largest carriers (Table 103), the largest, Trism, had an operating ratio of 97.8%. Among this group of carriers, the one with the lowest operating ratio (Allied Systems) had a ratio of 94.4%. Among the five smallest carriers (Table 105), all had operating ratios below 100% and the firm with the lowest operating ratio had a ratio of 93.8%. It appears that the largest firms in this sub segment have a somewhat poorer performance than the smallest carriers in the sub segment. Table 98--Other Specialized (Truckload) Large Carriers' Average Size and Operating Performance Number of Companies Reporting Total Revenue 77 $3,387,804,017 Units in Fleet 75 45,694 Assets 75 $1,471,968,903 Tons Carried 64 21,343,087 Ton-Miles 57 11,900,337,669 Shipments 58 1,106,175 Average Size of Load (Tons) 40 11.48 Length of Haul (Miles) 14 330 Average Revenue Per Mile 65 $2.15 Revenue Per Ton 16 $58.85 Revenue Per Ton-Mile 40 $0.97 Average % of Trucks Owned 31 60% % of Tractors Owned 62 52% % of Trailers Owned 62 91% Outside Vehicle Maintenance per Truck/Tractor 70 $2,444 Table 99--Other Specialized (Truckload) Large Carriers' Average Financial Performance Operating Income $1,892,045 Net Income $1,085,540 Operating Ratio 94.78 Net Profit Margin 3.68% Return on Equity 24.11% Table 100--Other Specialized (Truckload) Large Carriers' Average Size and Operating Performance: Five Most Profitable Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Hodges Trucking Oklahoma City, OK $12,212,621 272 $6,267,518 N/A N/A Boyle (T.F.) Trptn. Billerica, MA $14,502,361 308 $5,651,313 N/A 29,828,520 Trailer Transit Porter, IN $27,128,667 232 $4,436,272 N/A 318,603,690 Tonyan Bros. McHenry, IL $15,045,290 9 $3,650,196 N/A N/A Armored Motor Svc. Of America Rochester, NY $19,822,149 306 $15,459,143 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Hodges Trucking N/A N/A N/A N/A N/A N/A N/A Boyle (T.F.) Transportn. N/A 4.67 N/A N/A $2.27 N/A $0.49 Trailer Transit N/A 12.30 N/A N/A $1.05 N/A $0.09 Tonyan Bros. N/A N/A N/A N/A $3.70 N/A N/A Armored Motor Svc. Of America N/A N/A N/A N/A $7.65 N/A N/A Table 100--Other Specialized (Truckload) Large Carriers' Average Size and Operating Performance: Five Most Profitable Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Hodges Trucking N/A 100% 100% N/A Boyle (T.F.) Trptn. 100% 100% 100% $1,967 Trailer Transit N/A 0% N/A N/A Tonyan Bros. N/A 100% N/A $882 Armored Motor Svc. Of America 100% N/A 100% N/A Table 101--Other Specialized (Truckload) Large Carriers' Average Financial Performance: Five Most Profitable Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Hodges Trucking $1,866,255 $859,689 84.72 7.04% 130.63% Boyle (T.F.) Trptn. $1,850,873 $2,079,562 87.24 14.34% 101.33% Trailer Transit $2,688,882 $2,667,953 90.09 9.83% 96.80% Tonyan Bros. $475,695 $359,652 96.84 2.39% 90.98% Armored Motor Svc. Of America $344,340 $2,811,562 98.26 14.18% 75.71% Table 102--Other Specialized (Truckload) Large Carriers' Average Size and Operating Performance: Five Largest Carriers Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles (in thousands) Trism Kennesaw, GA $309,880,265 6,697 $218,824,918 N/A 1,437,800 Customized Transportn. Jacksonville, FL $296,172,450 1,315 $113,023,697 N/A N/A Allied Systems Decatur, GA $256,900,471 2,583 $119,693,118 N/A 521,429 Cassens Transport Edwardsville, IL $176,211,766 1,189 $43,121,157 N/A 132,590 Anderson Trucking Service Saint Cloud, MN $165,812,000 N/A N/A N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Trism N/A 7.58 N/A N/A $1.63 N/A $0.22 Customized Transportation N/A N/A N/A N/A $5.22 N/A N/A Allied Systems N/A 6.42 N/A N/A $3.16 N/A $0.49 Cassens Transport N/A 1.84 N/A N/A $2.44 N/A $1.33 Anderson Trucking Service N/A N/A N/A N/A N/A N/A N/A Table 102--Other Specialized (Truckload) Large Carriers' Average Size and Operating Performance: Five Largest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Trism N/A 53% 100% N/A Customized Transportation 0% 2% N/A $8,085 Allied Systems N/A 100% 100% $4,814 Cassens Transport N/A 100% 100% $5,719 Anderson Trucking Service N/A N/A N/A N/A Table 103--Other Specialized (Truckload) Large Carriers' Average Financial Performance: Five Largest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Trism $6,915,167 -$5,605,023 97.77 -1.81% -24.22% Customized Transportation $14,605,342 $11,131,827 95.07 3.76% 27.85% Allied Systems $14,304,080 $6,292,498 94.43 2.45% 10.43% Cassens Transport -$1,088,791 $276,126 100.62 0.16% 3.65% Anderson Trucking Service N/A N/A 97.00 N/A N/A Table 104--Other Specialized (Truckload) Large Carriers' Average Size and Operating Performance: Five Smallest Carriers : Carrier Location Revenue Units in Fleet Assets Tons carried Ton-miles Forbes Transfer Co. Wilson, NC $11,275,730 245 $6,715,537 566,717 136,705,225 Jones Feed & Grain Cumming, GA $11,319,341 387 $3,455,127 N/A N/A Campbell & Assoc. Industry, CA $11,353,802 318 $2,802,197 N/A N/A Roeder Cartage Co. Lima, OH $11,412,889 287 $1,559,175 N/A N/A Clark Transfer Harrisburg, PA $11,530,247 170 $2,512,061 N/A N/A Carrier Total Shipments Average Load (Tons) Average Haul (Miles) Revenue Per Shipment Revenue Per Mile Revenue Per Ton Revenue Per Ton-Mile Forbes Transfer Co. 26,925 14.96 241 $418.78 $1.23 $19.90 $0.08 Jones Feed & Grain N/A N/A N/A N/A N/A N/A N/A Campbell & Assoc. N/A N/A N/A N/A N/A N/A N/A Roeder Cartage Co. N/A N/A N/A N/A N/A N/A N/A Clark Transfer N/A N/A N/A N/A $3.00 N/A N/A Table 104--Other Specialized (Truckload) Large Carriers' Average Size and Operating Performance: Five Smallest Carriers (Continued) Carrier % Trucks Owned % Tractors Owned % Trailers Owned Outside Vehicle Maintenance per Truck/Tractor Forbes Transfer Co. N/A 100% 100% $747 Jones Feed & Grain N/A 69% 10% $701 Campbell & Assoc. N/A 48% 18% N/A Roeder Cartage Co. N/A 0% 0% $14,177 Clark Transfer N/A 100% 100% $2,280 Table 105--Other Specialized (Truckload) Large Carriers' Average Financial Performance: Five Smallest Carriers Carrier Operating Income Net Income Operating Ratio Net Profit Margin Return on Equity Forbes Transfer Co. $656,457 $817,986 94.18 7.25% 15.24% Jones Feed & Grain $512,712 $860,335 95.47 7.60% 35.58% Campbell & Assoc. $706,562 $711,553 93.78 6.27% 47.34% Roeder Cartage Co. $572,520 $33,172 94.98 0.29% 5.41% Clark Transfer $430,596 $419,426 96.27 3.64% 48.75% Summary Charts and Graphs for Other Large Carriers Summary Data for Other Large Carriers Other Large Carriers Descriptive Statistics Number of Companies Minimum Maximum Mean Std. Deviation Financial Summary Revenue 77 11,275,730 309,880,265 43,997,455 59,073,959 Expenses 77 9,066,109 302,965,098 42,007,696 56,988,792 Operating Income 75 (2,083,186) 14,605,342 1,892,045 2,877,037 Net Income 75 (5,605,023) 11,131,827 1,085,540 1,836,240 Total Assets 75 958,979 218,824,918 19,626,252 34,663,486 Total Liabilities 75 (1,899,564) 195,679,905 12,942,931 28,648,958 Total Equity 75 (2,869,057) 60,339,529 6,683,321 9,727,969 Operating Ratio 77 75 117 95 6 Net Profit Margin 75 -5% 14% 4% 4% Return on Equity 73 -82% 155% 24% 35% Individual Expense Items Drivers and Helpers Wages 20 - 6,042,942 1,997,438 1,852,388 Insurance 74 - 12,187,101 1,308,876 2,132,620 Outside Vehicle Maintenance 71 - 6,433,749 544,719 1,169,665 Purchased Transportation 20 - 14,295,135 3,482,694 4,626,900 Fleet Composition (Items as a percent of total) Trucks Owned 31 0% 100% 60% 47% Trucks Leased 31 0% 100% 40% 47% Tractors Owned 62 0% 100% 52% 43% Tractors Leased 62 0% 100% 48% 43% Trailers Owned 62 0% 100% 91% 28% Trailers Leased 62 0% 100% 9% 28% Operating Statistics Total Units in Fleet 75 - 6,697 609 867 Total Highway Miles 71 - 189,696,383 21,728,253 28,185,203 Total Tons Carried 64 - 9,599,512 333,486 1,300,053 Total Ton-Miles 57 - 1,476,448,102 208,777,854 302,945,504 Total Shipments 58 - 369,212 19,072 53,490 Revenue per Mile 65 $1.05 $10.77 $2.15 $1.55 Revenue per Ton 16 $6.12 $247.24 $58.85 $69.15 Revenue per Shipment 15 $88.44 $915.09 $463.95 $242.11 Revenue per Ton-Mile 40 $0.06 $29.13 $0.97 $4.57 Average Load (Tons) 40 0 22 11 6 Average Haul (Miles) 14 30 778 330 248 Outside Vehicle Maintenance per Truck/Tractor 70 - 15,255 2,444 3,592 Valid N (listwise) - 131 General Freight - Small Carriers 59 23 GENERAL FREIGHT - LTL CARRIERS GENERAL FREIGHT - SMALL CARRIERS 47 GENERAL FREIGHT - MEDIUM-SIZED CARRIERS GENERAL FREIGHT - LARGE CARRIERS GENERAL FREIGHT - LARGE CARRIERS MOVING/HOUSEHOLD GOODS CARRIERS MOVING/HOUSEHOLD GOODS CARRIERS TANKER CARRIERS TANKER CARRIERS REFRIGERATED CARRIERS REFRIGERATED CARRIERS BULK MATERIALS - NON TANK CARRIERS BUILDING MATERIALS CARRIERS HEAVY EQUIPMENT CARRIERS HEAVY EQUIPMENT CARRIERS HEAVY EQUIPMENT CARRIERS OTHER SMALL CARRIERS OTHER MEDIUM SIZED CARRIERS OTHER MEDIUM SIZED CARRIERS OTHER LARGE CARRIERS OTHER LARGE CARRIERS