Gross revenue data for 1998 appears strong, although the rate of growth reported by 81 carriers was not as high in 1998 as it was in 1997. Profit margins as a whole decreased slightly in 1998. The average operating ratio for carriers responding for this report declined about one-fourth of one percent.

With 81 entries, fewer carriers are listed in this Gross Revenue Report than the 96 that were named in the report last year. As the business climate becomes more competitive, privately held carriers are more protective of their financial data. Another factor is industry consolidation. A number of carriers that reported revenue in the past have been acquired by large public stock companies. These do not release data from their individual operating divisions.

Although fewer carriers are listed, gross revenue is still higher than the previous year. These 81 carriers report a total of $4,293,754,007 for 1998, up from $3,994,865,593 in 1997. The report published in September 1998 showed total revenue of $4,727,164,571 for 96 carriers responding with their 1997 data, up from $3,302,905,499 in 1996. Allowing for variations in the number of carriers responding to our request for financial data, we still see an increase of almost $1 billion in refrigerated carrier revenue since 1995.

This total also is affected by one legal proceeding. AmeriTruck Distribution, which would have contributed roughly $300 million to the total, is in Chapter 11 bankruptcy. The company cannot release unaudited figures for 1998, so it is not included in this report.

$300 Million Increase The revenue increase reported by these 81 carriers amounts to almost $300 million and represents a 7.5% rate of growth, down slightly from the 9.8% growth rate in the 1998 Gross Revenue Report and down substantially from the 15.5% rate of growth shown in the 1997 Gross Revenue Report. The 7.5% growth rate for 1998 is much closer to the 8.2% growth rate reported for 1995 by 99 carriers in 1996.

Slightly more than 80% of the 81 carriers responding to our survey reported increased revenue in 1998. This percentage is essentially the same as the 83% reporting an increase for 1997 and the 79% reporting an increase in 1996. It is 7% more than the 73% that experienced revenue gains in 1995.

Operating ratios are available for 75 of these 81 carriers. The average 1998 operating ratio for carriers in this report is 94.25, roughly one-quarter point higher than the 93.9 average ratio reported for 1997 operating ratios and 2.25 points better than the 96.5 average reported for 1996 operating ratios, but worse than the 90.7 average posted on 1995 revenue. One positive sign among refrigerated carriers is that only four reported an operating ratio in excess of 100 on 1998 revenue. Five carriers reported an operating ratio of 100 or higher on 1997 revenue, and 12 carriers reported 100 or higher on 1996 revenue. Nine carriers reported an operating ratio lower than 90, and 39 carriers reported a ratio lower than 95.

Operating Ratio Changes The biggest positive shift in operating ratio was 5.0 points from a respectable 96 to a fine 91. The worst showing was a 14.2 point shift from a spectacular 79.9 to a reasonable 94.1. The next in line was an eight point shift from 92.4 to 100.4, which would not be quite as notable if it did not belong to one of the biggest carriers in the industry.

The large carriers represented in this report become larger year after year. The first three carriers in this report account for more than $1 billion, and the first four total almost $1.5 billion in revenue. The total climbs to $2 billion at the seventh carrier on the list, earlier in the listings than ever before.

Some clumping of carriers seems to be taking place. The first three carriers in the report all show 1998 revenue above $300 million, which is followed by a drop of almost $100 million to the fourth carrier on the list. The next group of seven carriers report revenue between $169 million and $101 million. After the 14th carrier with $85 million, the curve seems to smooth out, dropping in fairly even increments to $1 million for the last carrier listed.

However, the report is extremely top-heavy. The first nine carriers account for almost half the report total, and the first 16 make up almost three-quarters of the total. This all pales in comparison to dry van carriers, however. It takes the total of the top 12 refrigerated carriers to equal the revenue of Schneider National, the largest dry van truckload carrier.

Combined Fleet Data We have fleet data for all carriers in this report. These carriers operate a combined fleet of 29,936 tractors and 41,108 trailers. A small unknown portion of the trailer fleet is dry vans. The tractor-to-trailer ratio for this combined fleet is 1.37:1, essentially the same as it has been for the past four years. Actual trailer fleet size ranges from 3,622 trailers at C R England Inc to 15 trailers at C O Bruce & Son Inc. The trailer fleet reported by C R England for 1998 is actually smaller than the 3,900 trailers the company reported for 1997, but is larger than the 3,300 and 2,875 trailers reported by C R England for 1996 and 1995, respectively. With the significant increase in C R England revenue, this smaller trailer fleet may be an indication of significant productivity gains.

This report shows an average annual revenue per trailer of $107,803 in 1998, up from $100,154 for 1997 revenue, $93,969 shown in the 1996 data, $96,902 in 1995, and $94,222 reported for 1994. Over the long term, the average annual revenue per trailer seems to be in the upper $90,000 range and may be climbing as carriers make productivity gains. However, average revenue per tractor figures may contradict the idea of improved productivity as these 81 carriers report an average annual revenue per tractor of $146,843, down slightly from the $147,835 reported for 1997 revenue. Allowing for this slight decline, the news is still good, because the average revenue per tractor is still well above the $132,276 reported for 1996 revenue, the $132,284 for 1995, and the $136,183 reported for 1994 revenue.

Larger Average Carrier Average revenue for carriers listed in this report would be $53,009,308, up sharply from $49,241,298 for 1997, $40,485,348 for 1996, and $38,766,486 for 1995. Average annual revenue is up roughly $20 million from $35,924,598 for a comparable group of carriers in 1994. This average carrier would rank number 24 on the list, a position that has remained fairly stable for the past three years.

The median carrier in this report (number 41) had $17,025,466 in gross revenue for 1998, down from $21.4 million in 1997 revenues for the median carrier. However, the median carrier in this report is still larger than the $13.7 million reported for this position on 1996 revenues. This median is the second highest on record for this Gross Revenue Report. The median for 1995 revenue was $16.5 million. Previous reports show a median of $15 million on 1994 revenue and $12.4 million on 1993 revenue. The median may be returning to the area around $16 million that it posted for several years, showing fairly strong growth among the carriers in the middle of the revenue spectrum. However, the list is still dominated by a few extremely large carriers at the top.

Industry Health Stable With annual revenue for 1998 growing at a decent rate, the health of the industry can be characterized as stable. The number of carriers reporting revenue gains remains at 80%, roughly comparable to 83% for 1997, and up from 79% for 1996 revenue. Except for a dip to only 73% reporting growth in 1995, 80% seems to be a long-term average for the number of carriers reporting growth. Another indication of stability is that only 14 carriers reported a drop in revenue for 1998. This is two less carriers than the 16 that reported a drop in revenue for 1997 or the 22 that decreased for 1996. However, among those with falling revenue are three carriers in the $100 million range, and nine of the declining 14 had revenue above $20 million. The picture of declining revenue might be much worse if AmeriTruck were able to report its data.

Operating ratios provide grounds for concern. The average operating ratio for 1998 rose to 94.25, up just slightly from 93.9 on reported revenue for 1997. Many carriers express dissatisfaction with profitability. Although operating ratios seem relatively stable, they are nowhere near the low 90s and high 80s reported for 1995 or 1994. Nine carriers report an operating ratio below 90 with a range from 82 to 89.9. The number of carriers with an operating ratio below 95 is rising. Of the 75 carriers providing operating ratios, 39 report a ratio below 95. This is about the same as the 37 carriers reporting a ratio less than 95 for 1997 revenue and quite a bit more than the 29 carriers with operating ratios below 95 for 1996 revenue. The number of 1998 operating ratios below 95 is comparable to the 38 carriers that reported a 95-or-below level on 1995 revenue. Only four carriers report an operating ratio above 100, down by one carrier from the five reported on 1997 revenue and down sharply from the 12 operating higher than 100 on 1996 revenue.

The average rate of growth for all carriers is down slightly, and the details may show cause for concern. One small carrier posted a 73.4% growth rate, and one grew at 36.2%. This report does not show a group of carriers growing at more than 40% as it did for 1997 revenue. Only one carrier exceeded 30%. The report on 1997 revenue showed 22 carriers growing faster than 20%. This report on 1998 revenue contains only six carriers that grew at more than 20%. Only 17 carriers grew at better than 15%. Those 17 are 20% of the total for revenue reported for 1998. On 1997 revenue, 27 carriers grew at 15% or more; they represented 28% of those providing data. The number of carriers posting good growth rates for 1998 is roughly the same as it was for 1997 with 36 carriers showing growth of 10% or better on 1998 revenue and 37 carriers at 10% or higher on 1997 revenue.

Few Grew Rapidly Ten carriers posted revenue increases exceeding $10 million for 1998 compared to nine carriers making that jump in 1997 and 12 in 1996. The largest revenue increase was more than $68 million at C R England. Three carriers posted gains of more than $30 million. Only 32 carriers posted gains of $1 million or more in 1998 compared to 50 carriers that gained as much on 1997 revenue. Only 44 carriers grew by more than $500,000 in 1998, down from 63 carriers with a gain of at least half a million in 1997.

Perhaps the biggest cause for concern should be the 16 carriers that lost revenue or reached only their 1997 revenue levels. Of those 16, six generated more than $50 million and three generated more than $90 million.

Obviously, more refrigerated carriers are in business than are shown in this report. The big ones are easy to find and are usually fairly forthcoming with information. Our circulation list gives us a good tool with which we can locate smaller carriers. However, owners of small carriers are not as likely to provide financial data on their operations as their colleagues at larger companies. As the business climate becomes more competitive, nearly all carriers, with the exception of the publicly owned companies, become more protective of their revenue information. Most of our information comes directly from the carriers, but we have used other sources.