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Growth in the Trucking Sector Translates to New Opportunities for Your Institution

Strategically Speaking
Jun 19, 2013

Author of Trucking Sector Article | Pat True Author: Pat True,

Few industries in the Unites States represent the widespread demographics that we see in the trucking sector.  While overall economic expansion has been slower than most would like
during recent years, the trucking related businesses have been a bright spot.  For our own Lending Solutions business, trucking companies have historically represented 10 – 15% of the relationships managed by our financial institution clients.  Even as our overall business has expanded, that trucking proportion grew to 18% in 2012, largely due Trucking Sector Semi Truckto increases in the energy sector and pockets of growth in the manufacturing and construction sectors.  Consider these key metrics reported recently by the American Trucking Associations and the Bureau of Labor Statistics.  They point out how well small trucking related business could align with the goals of community based financial institutions to achieve loan growth.

  1. The trucking industry was a $642 billion dollar industry in 2012
  2. Most trucking companies are small businesses.  The ATA reports that 97.2% of them maintain fleets with fewer than 20 trucks while 90.5% operate fewer than six trucks.
  3. In 2011, 6.9 million people in the US were employed in trucking related jobs, up 1.5% from the previous year.  The industry also reported that there were an estimated 3.1 million truck drivers at that time.
  4. There are more than 440,000 for-hire motor carriers in the US and more than 700,000 private carriers.
  5. Business failure rates in this industry totaled an estimated 495 in 2012, which represented a decline of more than 38% from the previous year.
  6. Industry revenue rose 2.9% in 2012 while per mileage revenue rose 2.8%.

Source: ATA Trucking Trends 2013 and the Bureau of Labor Statistics

Representing a significant number of small business owners across the country, trucking businesses are also disbursed across virtually every market in the US.  For that reason, they can represent opportunities for most community based financial institutions.  That being said, lending in this sector does require some working knowledge of the business processes and terminology specific to trucking.  If you are looking for a great source of information for the industry, I would recommend the ATA Trucking Trends 2013 report referenced above.  It can be a meaningful industry analysis tool for institutions that want to explore this business sector and educate their lending staff.

Our financial institution clients typically want to explore lending opportunities that can have a significant impact on their local communities.  Trucking serves that goal very well, given that the majority of these companies are small businesses that employ locally and have a direct impact on local economies.  They also represent an opportunity to grow loan portfolios through equipment and working capital financing.

Have you experienced the opportunity to grow your loan portfolio through the trucking sector customers?  Share what you’ve learned. 

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