TT 100: Private Equity Alters For-Hire Trucking Landscape

By Daniel P. Bearth, Senior Features Writer

This story appears in the July 23 print edition of Transport Topics.

Trucking attracted significant new investment from private equity firms, and many of the top for-hire carriers responded to changing business conditions by moving into new markets, both here and abroad, according to the 2007 edition of the Transport Topics 100.

TT’s latest annual survey of the freight transportation industry showed that, with overall freight tonnage trending downward, some carriers moved capacity from longhaul lanes to more robust regional and intermodal freight markets. At the same time, mergers and buyouts continued to reshape the industry as cash-rich private investment firms stepped up the pace of acquisitions, completing more deals in the first five months of 2007 than in all of 2006.

A prime example of the shift occurred when one of the biggest names in truckload transportation, Swift Transportation, was taken over by its chairman Jerry Moyes. Another management buyout by the top executives of U.S. Xpress Enterprises is pending.

Several companies established or expanded offices in China and are expected to play a key role in the development of that nation’s trucking and logistics industries.

Nearly all carriers took a cautious approach to adding freight-hauling capacity during the year, reflected in the very small increases in company-owned and owner-operator tractors and trailers. Even though drivers seemed to be more plentiful, turnover remained exceptionally high, especially for some truckload carriers, limiting the ability to expand their fleets.

Meanwhile, concern over the cost and performance of trucks with cleaner-burning 2007-model engines led many firms to stockpile 2006-model trucks.

Regional LTL carrier A. Duie Pyle Co. has 113 trucks parked on three company lots waiting to be put into service. The trucks were purchased last year to avoid buying new equipment in 2007, said Steven O’Kane, president.

“With the extra cost of $8,500 per truck, the possible fuel degradation and extra maintenance, it seemed like a good decision,” O’Kane said.

Details on these and other developments within the freight transportation industry are detailed in the TT Top 100 section, included in this edition.