In the United States, for-hire trucking is conducted by private enterprise. Many for-hire carriers are specialized and confine their operations to one or a limited number of commodities. Some, however, handle a wide variety of products. Regulatory statutes group for-hire trucking companies into two major classifications. Common carriers serve the general public and have certain obligations. Contract carriers serve one or a limited number of shippers under a long-term contract.
Government contributes to truck transportation by providing an extensive highway system. Truck operators contribute substantially to highway support through user taxes, including fuel taxes and vehicle registration fees.
Motor trucking is not a capital-intensive industry; that is, the investment required is small relative to revenues produced. Among large for-hire companies, a dollar of investment produces about five dollars in annual operating revenues. On the other hand, motor-trucking operations are highly labor-intensive. The total cost of wages for large common carriers is about 60% of total operating revenues. About 85% of the wage dollar is paid to operating employees, those involved in operating terminals and trucks.
Operating expenses consume about 95% of operating revenues among large for-hire trucking companies, not including income taxes and interest payments. This high operating ratio indicates a small return on sales for the industry. The small investment relative to revenues generated, however, makes possible a satisfactory rate of return on investment.
