United States Department of Transportation
i
Motor Carrier Industry Profile Study: Financial and Operating Performance Profiles by Industry Segment 2001-2002
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2004-09-01
[PDF-123.76 KB]
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Abstract:This report profiles the motor carrier industry and its significant operating segments. It is one of a series of reports analyzing various aspects of the motor carrier industry. Other reports in the series focus on the safety performance of the industry and its major segments and on the linkage between safety performance and operating performance overall, as well as in each of the industry’s major segments. This report has two primary objectives. The first is to focus on some basic measures detailing the financial performance of for-hire carriers in 11 major industry segments. The second is to compare the operating performance of these industry segments. Beginning with economic deregulation in 1980 and continuing to the present, the motor carrier industry has undergone a period of change and turmoil. Successful firms have adapted to the new circumstances and have emerged as highly efficient transport providers, leading to remarkable productivity gains and performance improvements in the industry overall. In large measure, the adaptive carriers have passed along performance and productivity gains to their customers in the form of lower rates and improved services. As a consequence, however, the overall profit profile of the industry has become less attractive to investors because of the generally competitive nature of the industry and because some segments exhibit near-perfect competition. Motor carriers continue to struggle with a number of issues, including consistently low profit margins and high driver turnover. Several of the individual industry segments appear to be particularly troublesome in terms of investment opportunities, although several others provide investment opportunities above the median for the industry as a whole. The best investment opportunities in 2002 appear to have been among motor vehicle carriers and package couriers, which had higher average returns on transportation investment, higher average returns on equity, and lower average debt-to-equity ratios than the median levels for all carriers combined. The worst investment opportunities seem to have been among the bulk carriers, which had lower average returns on transportation investment, lower average returns on equity, and higher average long-term debt-to-equity ratios than the industry median.
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