CCJ Top 250: Annual ranking of fleets shows 5.7% revenue growth in 2012

By Avery Vise on
ccj top 250

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Continued economic recovery and the challenges and opportunities afforded by tighter regulations and the aging of post-deregulation entrepreneurs were some of the driving factors for mergers and acquisitions in 2012 (more on that below), but on its face, the industry’s 2012 performance wouldn’t seem to be a major driver. In context, however, revenue growth was fairly strong.

CCJ Top 250 is the most comprehensive ranking of carriers available. Visit CCJTop250.com to see the full report, along with a sortable data that includes revenues, number of trucks, tractors, trailers and drivers, and carriers by type of haul and geographic region.

The for-hire carriers in the 2013 CCJ Top 250 that reported revenue posted a 5.7 percent increase in revenue in 2012 compared to 2011. While that’s a solid increase, it lags behind the 2011 and 2010 year-over-year revenue increases of 11.6 percent and 10.5 percent, respectively. Of course, those years represented a recovery from one of the worst years ever in trucking, so perhaps it would be too much to expect the double-digit growth to continue.

Also, the 5.7 percent revenue growth outpaced capacity growth. Isolating just those carriers that reported figures for both the 2013 and 2012 rankings, the driver force increased 2.2 percent, while the number of power units operated was up 1.5 percent. This reaffirms comments made by carriers that they are being conservative as the recovery matures.

Reflecting the economy

Digging deeper into the numbers, 2012 wasn’t as uniformly good from a revenue growth standpoint as 2011. Of the 190 carriers that reported revenue for both 2012 and 2011, 26 reported lower revenues in 2012. While that isn’t high, it’s significantly more than the nine carriers that reported lower revenues in 2011 than in 2010. But that’s not too surprising since growth from 2010 was easier than growth from 2011.

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As in last year’s ranking, none of the industry segments saw lower revenues in 2012 than in 2011, although some segments were much stronger than others. The strongest revenue growth, 18.3 percent, was among carriers that transport motor vehicles, reflecting the continued rebound in automobile sales. This was down from the 22.8 percent growth for this segment the previous year, but that’s not surprising given the hit car sales took during the recession. The increase for this group had been 22 percent in 2010, but in 2009 the segment’s revenues had plummeted 29 percent.

Other segments posting double-digit revenue growth in 2012 were 10.3 percent for tank and bulk carriers and 10.2 percent each for flatbed/specialized and refrigerated. In all three cases, however, the rate of growth lagged behind 2011. Continued strong improvement in flatbed and tank likely reflects growth in housing construction and domestic energy production, respectively. Growth in refrigerated carrier revenues likely reflects, at least in part, the continued recovery in the job markets.

With the economic recovery still slow, chances are that the year-over-year comparisons in 2013 will be even tighter, but so far it doesn’t seem that any segments are turning negative.

Mergers, acquisitions

After all the mergers and acquisitions in trucking that took place between August 2011 and August 2012, you might think that the past 12 months would have been a little more quiet. Not hardly – and based on recent activity, you reasonably can expect more deals this year.

The ink was barely dry on last year’s CCJ Top 250 ranking of the largest for-hire carriers operating in the United States when investment firm Centerbridge Partners announced in August that it had acquired dedicated contract carriage company Cardinal Logistics Management Corp. That alone was noteworthy, but what made the deal a true blockbuster was the fact that Centerbridge already owned Greatwide Logistics Services, which was the largest primarily dedicated carrier company in the CCJ Top 250. In February, Centerbridge merged the two companies as Cardinal Logistics, which after the restructuring is ranked No. 27 this year.

Some of the deals involved new ownership of basically the same operation. Just last month, United Vision Logistics (No. 55) announced a change in ownership and a restructuring with management and lead lender GE Capital becoming significant shareholders. Previously, United Vision Logistics principally had been held by private equity firm Welsh, Carson, Anderson & Stowe.

Similarly, in January the key operating assets of RoadLink Transportation Solutions were acquired by RTS Holdings, a company founded by industry veterans Ken Kellaway and David McLaughlin with lead financial partner Oskie Capital, and relaunched as RoadOne IntermodaLogistics (No. 118) with many of the same personnel that had worked for RoadLink.

In another asset acquisition, Celadon Group (No. 36) in August 2012 obtained certain operating assets of McAllen, Texas-based USA Dry Van Logistics (No. 213 last year), which has ceased to exist.

In a somewhat unusual transaction, U.S. Xpress Enterprises (No. 11) late last year announced that its own Arnold Transportation Services unit had merged with LinkAmerica Corp. (No. 152 last year), which was owned by Tenex Capital Management. The succeeding carrier, which operates under the Arnold name, is owned jointly by U.S. Xpress and Tenex Capital.

Not all deals resulted in either the same or fewer carriers, however. Due to U.S. Xpress’ large minority ownership of Roaring Springs, Pa.-based Smith Transport, CCJ previously had treated Smith as part of U.S. Xpress for ranking purposes. At the beginning of this year, however, President Barry Smith announced that he had reacquired U.S. Xpress’ minority share and now owned 100 percent of Smith Transport, which is ranked No. 151 in this year’s CCJ Top 250. Another carrier, Abilene Motor Express (No. 239), last fall bought back from U.S. Xpress a final small share that U.S. Xpress had owned.

The deals just keep coming, including two transactions announced on the same day last month. In one, XPO Logistics, which owns Express-1 (No. 231), plans to buy nonasset last-mile transportation provider 3PD (No. 71). Meanwhile, Duff Brothers Capital Corp. announced an agreement to acquire publicly traded Frozen Food Express Industries (No. 62). Thomas and James Duff, owners of Duff Brothers Capital, also own refrigerated carrier KLLM Transport Services LLC (No. 67). Since neither transaction is final as of late July, these pending deals do not affect the CCJ Top 250.

These are just transactions where all parties are or were in the CCJ Top 250. There were quite a few others where CCJ Top 250 carriers acquired smaller operations.

Avery Vise

Avery Vise is executive director, trucking research and analysis for Randall-Reilly Business Media and also serves as senior editor, industry analysis for Commercial Carrier Journal. Previously, he was editorial director of Randall-Reilly’s Fleet/Dealer/Aftermarket group and had served as chief editor of CCJ for 10 years. From 1985 to 1998, Vise worked for McGraw-Hill’s Aviation Week Group, covering Congress and the Department of Transportation for publications about the commercial aviation industry. He has received numerous awards from American Business Media and the American Society of Business Publication Editors for his coverage of the trucking industry. Vise is a graduate of Georgetown University in Washington, D.C., with degrees in government and history.

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