Trucking is the #1 employer in 28 states. Most trucking companies operate 10 trucks or fewer, and only a handful (0.3% of all trucking companies) operate more than 100 trucks.
If you are talking about small businesses in America, or if you are talking about blue-collar jobs in America, you are talking about trucking.
However, when you’re talking about big trucking in America—the 0.3% of the market—you are increasingly talking about intermodal companies. In total, 76% of all IMDL containers are owned by entities other than the railroads, and most of those containers are owned by very large trucking firms.
JB Hunt is the largest owner of IMDL equipment in the industry and an innovator in the space. Over 48% of their revenue comes from intermodal operations, and 64% of their operating income. Intermodal shipping isn’t just the biggest part of JB Hunt’s business—it is its most profitable part.
The reason for this, as discussed in prior blog posts in this series, is that intermodal (truck-rail-truck) shipping attacks the two biggest costs of operating a trucking fleet: labor and fuel. Beyond that, it also reduces liability—each highway mile that a trucking company reduces is one less mile where a driver could potentially be involved in a motor vehicle accident.
All the big trucking companies are exploring electric trucks. They’re also looking at autonomous trucks. They’re investigating anything that can improve margins in what is a historically thin-margin business. But if you look at where they are actually investing, they are investing in their intermodal capabilities.
The future of trucking isn’t autonomous, and it isn’t electric—but it is green. The future of trucking is railroads.
This blog post was adapted from a presentation given in November 2023 at Loyola University Chicago. For the full original presentation, you can watch it on YouTube by following this link: https://www.youtube.com/watch?v=dV3NocGBszU.