Gross revenue data for 1999 strengthened with the rate of growth reported by 78 carriers higher than that reported by those same carriers for 1998. However, this slightly higher growth rate is still less than half that reported on 1997 revenue by 96 carriers responding to this survey in 1998.

Profit margins as a whole decreased slightly in 1999. The average operating ratio for carriers responding to this report declined about one-fourth of one percent. Many of the larger carriers experienced changes of 2% or more, and two of the largest publicly traded carriers actually lost money in 1999.

With 78 entries, fewer carriers are listed in this Gross Revenue Report than the 81 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. However, in one welcome break in this situation, Werner Enterprises, a large dry van carrier, submitted a report for its temperature-controlled division.

Although fewer carriers are listed, gross revenue is still higher than in the previous year. These 78 carriers report a total of $4,831,601,739 for 1999, up from $4,440,779,582 in 1998. The report published in September 1999 showed total revenue of $4,293,754,007 for 81 carriers responding with their 1998 data up from $3,994,865,593 in 1997. 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.

The totals in this and previous reports are affected by the recent actions of a single company. For 1997 and 1996, AmeriTruck Distribution reported roughly $300 million of the total. That company has dissolved, taking its large reported revenue out of the report. Competing carriers say that they noticed little if any increased business as a result of the AmeriTruck bankruptcy. Some of the components of AmeriTruck have reorganized into a new company. Others have resumed operation under the names they used prior to being acquired by AmeriTruck.

$400 Million Increase The revenue increase reported by these 78 carriers amounts to almost $400 million and represents an 8% rate of growth, slightly more than the 7.5% shown in the 1999 Gross Revenue Report, but down from the 9.8% shown in the 1998 report and down sharply from the 15.5% shown in the 1997 report. However, a look at growth since 1995 indicates that 7% to 8% is fairly normal and that the 15.5% is unlikely to be repeated. (Please turn page)

Slightly more than 85% of the 78 carriers responding to our survey reported increased revenue in 1999. This percentage is higher than the 80% shown in the 1999 Gross Revenue Report on 1998 business. It is basically the same as the 83% reporting an increase for 1997 and well above the 79% reporting gains in 1996.

Operating ratios are available for 69 of these 78 carriers. The average 1999 operating ratio for carriers in this report is 94.6, roughly one-quarter point higher than the 94.25 average ratio reported for 1998 and an additional quarter-point higher than the 93.9 average ratio reported for 1997. Although these operating ratios are better than the 96.5 average reported on 1996 business, profit margins have been narrowing steadily since 1995 when the average was 90.7. One sign of the profit difficulties facing refrigerated carriers is that six companies reported an operating ratio in excess of 100 on 1999 revenue. This is up from four carriers reporting an operating ratio of 100 or higher on 1998 revenue and five such reports on 1997 revenue. However, those reporting an operating ratio of 100 or more is still only half the 12 carriers reporting a loss on 1996 revenue. Six carriers reported an operating ratio lower than 90 for 1999, down from nine carriers reporting such a low operating ratio the previous year. On 1999 revenue, 28 carriers reported an operating ratio lower than 95, 11 fewer than the 39 carriers at this benchmark on 1998 revenue.

Operating Ratio Changes The biggest positive shift in operating ratio was 2.5 points from 99 to 96.5, neither a great performance, especially compared to a shift of five points from 96 to 91 for the best performing carrier in the 1999 Gross Revenue report. The worst showing was a shift of 8.8 points from 95.2 to 104. This was less than the largest shift of 14.2 points last year; however, that big shift still resulted in a reasonable performance of 94.1 instead of a money-losing 104. This poor performance would not be quite as notable if it did not belong to one of the biggest carriers in the industry. In fact, two of the top ten carriers reported operating ratios higher than 100.

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 more than $2 billion at the seventh carrier on the list. Some clumping of carriers seems to be taking place. The first four carriers in the report all show 1999 revenue above $300 million. This is followed by a drop of almost $100 million to the fifth carrier on the list. The fifth carrier heads a group of four, all reporting 1999 revenue in excess of $200 million. The ninth carrier reports less than $200 million and is part of a group of four carriers above the $100 million benchmark. At Number 13, revenue drops below $100 million with a group of three carriers in the $90 million range. After the big clumps at the top, the curve seems to smooth out, dropping in fairly even increments to slightly more than half a million for the last carrier listed.

However, the report is extremely top-heavy. The first eight carriers account for almost half the report total, and the first 19 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 13 refrigerated carriers to equal the revenue of Schneider National, the largest dry van truckload carrier, and seven of the largest refrigerated carriers to reach the revenue of J B Hunt, the second largest dry van carrier that trails Schneider by almost $1 billion.

Combined Fleet Data We have fleet data for all carriers in this report. These carriers operate a combined fleet of 30,178 tractors and 44,416 trailers. A small unknown portion of the trailer fleet is dry vans, and a few of the power units are straight trucks. The trailer-to-tractor ratio for this combined fleet is 1.47:1, roughly the same as it has been for the past five years. The number of trailers compared to tractors is edging up slightly, rising from 1.37:1 in the 1999 Gross Revenue Report, perhaps as larger carriers institute more drop-and-hook operations in an effort to reduce loading and unloading delays. Actual trailer fleet size ranges from 3,558 at C R England Inc to seven trailers at R J Express. The trailer fleet at C R England is actually smaller now than the 3,622 trailers reported last year or the 3,900 trailers reported the year before. C R England revenues are higher for 1999 than for either of those prior years; so the smaller trailer fleet may indicate improved productivity.

This report shows an average annual revenue per trailer of $117,846 in 1999, up from $107,803 in 1998, $100,154 in 1997, $93,969 in 1996, $96,902 in 1995, and $94,222 for 1994. Three years of averages above $100,000 per trailer per year seem to indicate a trend to higher productivity. This is reinforced by an average annual revenue per tractor of $153,914, up from an average of $146,843 in 1998 and up from the previous year when carriers averaged revenue of $147,835 per tractor per year. A trend to higher averages per tractor certainly seems likely considering that carriers reported on $132,276 per tractor per year on 1996 revenue and $132,284 per tractor annually on 1995 revenue.

Larger Average Carrier A composite of the carriers covered by this report would show an average 1999 annual revenue of $61,943,612, up from $56,933,071 reported by these same carriers for 1998. This average is quite a bit higher than the average of $53,009,308 reported by 81 carriers in the 1999 Gross Revenue Report. Average annual revenue has been rising steadily since 1995. A carrier posting this average revenue would rank Number 24 on the list, a position that has remained fairly stable for the past four years.

The median carrier in this report (Number 39) had $24,200,000 in gross revenue for 1999, up from $17,025,466 in 1998 revenues for the median carrier. On 1997 revenue, the median carrier had revenue of $21.4 million. This median is the highest on record for this Gross Revenue Report. For most of the 1990s, the median carrier was in the $14 to $16 million range.

Industry Health Stable If the industry growth rate was the only factor to consider, the decent increases of 1999 would allow industry health to be characterized as stable. With 85% of carriers reporting increases, up from the 80% reporting growth on 1998 revenue, stability would seem an appropriate description if not for narrowing profit margins. The percentage of carriers reporting revenue growth has been in the 80s every year except 1997 when only 73% of carriers reported rising revenues. Another indication of stability is that only 10 carriers reported a drop in revenue for 1999. This is four fewer than the 14 carriers that reported a drop in revenue for 1998 and six fewer than those reporting shrinking revenues in 1997. The recent record was posted on 1996 revenues when 22 carriers reported decreases. Only one carrier with more than $100 million in revenue reported a decrease for 1999 compared with three making such a report on 1998 revenues. Of those reporting decreases for 1999, six had gross revenue in excess of $20 million, and five had revenue in excess of $35 million.

Operating ratios provide a reason for real concern about industry health. The average operating ratio for 1999 rose to 94.6, up from 94.25 for 1998 and from 93.9 on revenue reported for 1997. Almost uniformly, carriers express dissatisfaction with profitability. Although operating ratios seem fairly stable, carriers say they are too high to make the investments needed in driver wages and equipment technology for competitive performance. Recent operating ratio averages are nowhere near the low 90s and high 80s reported on 1995 and 1994 revenue.

Only six carriers report an operating ratio below 90 for 1999 compared to nine carriers reporting a below-90 ratio for 1998. Among these carriers, the range - 70 to 88.37 - remains about the same as it was for 1998 revenue when the below-90 operating ratio range was 82 to 89.9. The number of carriers with an operating ratio below 95 is falling. Of the 69 carriers providing operating ratios, 22 report a ratio below 95. For 1998 revenue, the number reporting a below-95 ratio was 39, about the same as the 37 reporting a below-95 ratio for 1997 revenue. Six carriers report an operating ratio above 100 on 1999 revenue, up two from the four carriers above 100 for 1998 results. Five carriers reported an operating ratio above 100 for 1997 revenue as did 12 carriers on 1996 revenue. The troublesome factor in the current Gross Revenue report is that two of the six money-losers are in the top 10 carriers.

Average Growth Rate Average growth rate for all carriers is up slightly to 8% from 7.5%. In addition, the number of carriers reporting rapid growth is up with 15 carriers reporting growth exceeding 20% in 1999 compared to only six with a plus-20% growth rate for 1998. One carrier reported growth of 148%; however, this was the result of acquisitions and that company now is reported to be in financial difficulty. Higher growth rates were all among the smaller carriers with only one reporting growth higher than 50% and three growing faster than 40%. Although only six carriers grew faster than 20%, 19 of those reporting exceeded 15% growth, up two from the 17 reporting growth of more than 15% on 1998 revenue. The number of carriers growing faster than 10% is down slightly to 31 for 1999 revenues compared to 36 at 10% or more for 1998 revenue and 37 growing faster than 10% in 1997.

Twelve carriers posted revenue increases exceeding $10 million for 1999. This group includes the one report based on acquisitions. The number was 10 carriers growing more than $10 million in 1998 and nine making that jump in 1997. Asche Transportation reported a gain of $91 million, most of it through acquisition. The next largest revenue jump was $44 million at Grojean Transportation. In all, eight carriers reported growth exceeding $20 million. The number of carriers growing by more than $1 million was up to 61 from only 32 reporting such gains on 1998 revenue.

Perhaps the biggest cause for concern should be the nine carriers that lost revenue or only reached their 1998 revenue levels. Of those nine, one is among the largest in the country, and five others all had revenue in the $25 million or higher range, including two at or near $90 million.

Obviously, more refrigerated carriers are in business than those 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.