Quantive Valuations performs business valuations for trucking companies, logistics businesses, 3PL’s, warehousers, and a wide variety of transportation related entities. Our deep experience with the above positions us uniquely to be able to address the special attributes of the transportation business.
Typically our analysts complete valuations for:
- Trucking Companies
- Warehousing companies
- Long and Short Haul Companies
- Freight Forwarders
Considerations in Valuing Trucking Companies
The transportation business faces unique challenges. Some of the items that we will typically take into account include:
- Is the company a long or short haul company?
- Does the company own its own fleet or is rolling stock leased?
- Does the company own or lease its facilities? Are they collocated with a customer?
- How many jobs are brokered out? What percentage of jobs to they accept as brokered?
- Is the fleet all company drivers? Owner operators?
- What is the safety record of the company? Any serious incidents?
- Does the company do any LTL work?
About the Trucking Industry
The trucking industry is largely tied to the broader economy – so much so in fact that it is considered a “bellweather” or leading indicator for economic forecasting. To that end, fluctuations in the economy are quickly felt by the nations trucking company – a fact that can impact trucking company business valuations significantly.
The industry has been in a slight decline, stemming in large part from the economic recession. The industry peaked in approximately 2006, and while performance has climbed back from the recession it still is not at 2006 levels. Estimates are that in 2013 truck sales will be approximately 270,000 – significantly off the 300,000 sold in the 2006 time frame.
Other factors impacting the industry:
- Better scheduling has reduced deadhead loads
- Mileage is down – as a consequence of both scheduling and fuel prices
- The industry has continued to face a prolonged driver shortage
These factors should all be considered in the course of a trucking company business valuation. Consider as an example the driver shortage: how successful has the subject company been at recruiting and maintaining its staff? To the extent that they are experiencing lost revenues due to staffing issues it would weight on their valuation.