We thought it would be an interesting exercise to take the 2019 Fortune 500 list and break out the Top 100 shippers of freight. The Fortune 500 is an annual, iconic tradition that lists the Top 500 companies in the U.S. by revenue, public or private as long as they file financial statements with the U.S. government.
We then narrowed down the list by removing any companies that do not consistently pay to move physical goods or freight as part of their regular operations. Doing so eliminated virtually all technology, healthcare, financials, utilities and some industrials (such as airlines) from the list. We also removed any transportation companies that made the list as moving freight would be revenue and not an expense.
Once we narrowed down the Fortune 500 to the Top 100 shippers, we then made several important assumptions. First, we assumed that the biggest shippers in the U.S. spend 5% of their revenue on transportation. Second, we used the chart below from Goldman Sachs and SJ Consulting that breaks down the North American logistics market in 2018. As one can see, the $743 billion trucking market (including both for-hire and private fleets) accounted for 62% of total transportation spend. Therefore, we assumed that, of the 5% of revenue that top 100 shippers spend on transportation, 62% of it was spent on trucking. When you run through those assumptions, the bottom line is that the top 100 shippers in the U.S. account for 23% of total trucking spend.
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Andrew is research analyst on the Freight Intel Group and a recent graduate of the University of Tennessee at Chattanooga, where he graduated magna cum laude. Andrew started as an intern with FreightWaves in October 2018 and joined full-time upon graduation. He co-hosts the freight finance podcast "Great Quarter, Guys" on Tuesdays at 2 p.m. EST.