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How Do Trucking Companies Make Money?

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This graphic shows how trucking companies make money along with their expenses.

How Do Trucking Companies Make Money?

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Today, there are roughly 600,000 trucking companies in America.

During the pandemic, the number of companies jumped by 100,000 as demand for goods accelerated. Compared to rail, trucking is typically faster and more direct for transporting goods. Trucks hauled almost 73% of freight by weight across the country in 2022.

This graphic shows how these firms make money, based on J.P. Morgan analysis featured in a 2024 report from Global X.

Under the Hood

On average, trucks earn $1.98 per pile. Here’s how their expenses break down:

Expense$ Per MileShare of Expenses
Fuel-$0.4324%
Truck Payments-$0.2715%
Repairs-$0.179%
Insurance Premiums-$0.084%
Permits & Licenses-$0.021%
Tires-$0.042%
Tolls-$0.032%
Driver Wage-$0.6033%
Driver Benefits-$0.1810%
Total Expenses-$1.82100%

The average carrier earns an operating profit of 16 cents per mile.

Amid steadily increasing wages, 43% of expenses are driver-related, which includes salaries and benefits. In 2022, over 3.5 million truck drivers worked in America.

Fuel is another major cost, accounting for almost a quarter of total expenses.

The Rise of Autonomous Truck Companies

In 2024, Aurora Innovation is anticipating to see driverless trucks on Texas highways.

This comes after several years of testing, where trucks are guided by sensors and software that include radar and lidar.

They are joined by startups Kodiak Robotics, Gatik AI, and TuSimple that have collectively driven for companies spanning from Walmart to FedEx.

Given the high costs of labor, these companies may see higher margins and longer drive times, which are currently capped at 11 hours. However, safety concerns still remain, and autonomous truck driving regulations are largely determined at the state level.

Despite these factors, investor interest appears strong. In 2023, Aurora raised $850 million in an overall dismal funding environment for startups.

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Economy

Economic Growth Forecasts for G7 and BRICS Countries in 2024

The IMF has released its economic growth forecasts for 2024. How do the G7 and BRICS countries compare?

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Faded horizontal bar chart visualization of G7 and BRICS countries' real GDP growth forecasts for 2024.

G7 & BRICS Real GDP Growth Forecasts for 2024

The International Monetary Fund’s (IMF) has released its real gross domestic product (GDP) growth forecasts for 2024, and while global growth is projected to stay steady at 3.2%, various major nations are seeing declining forecasts.

This chart visualizes the 2024 real GDP growth forecasts using data from the IMF’s 2024 World Economic Outlook for G7 and BRICS member nations along with Saudi Arabia, which is still considering an invitation to join the bloc.

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Mixed Economic Growth Prospects for Major Nations in 2024

Economic growth projections by the IMF for major nations are mixed, with the majority of G7 and BRICS countries forecasted to have slower growth in 2024 compared to 2023.

Only three BRICS-invited or member countries, Saudi Arabia, the UAE, and South Africa, have higher projected real GDP growth rates in 2024 than last year.

GroupCountryReal GDP Growth (2023)Real GDP Growth (2024P)
G7🇺🇸 U.S.2.5%2.7%
G7🇨🇦 Canada1.1%1.2%
G7🇯🇵 Japan1.9%0.9%
G7🇫🇷 France0.9%0.7%
G7🇮🇹 Italy0.9%0.7%
G7🇬🇧 UK0.1%0.5%
G7🇩🇪 Germany-0.3%0.2%
BRICS🇮🇳 India7.8%6.8%
BRICS🇨🇳 China5.2%4.6%
BRICS🇦🇪 UAE3.4%3.5%
BRICS🇮🇷 Iran4.7%3.3%
BRICS🇷🇺 Russia3.6%3.2%
BRICS🇪🇬 Egypt3.8%3.0%
BRICS-invited🇸🇦 Saudi Arabia-0.8%2.6%
BRICS🇧🇷 Brazil2.9%2.2%
BRICS🇿🇦 South Africa0.6%0.9%
BRICS🇪🇹 Ethiopia7.2%6.2%
🌍 World3.2%3.2%

China and India are forecasted to maintain relatively high growth rates in 2024 at 4.6% and 6.8% respectively, but compared to the previous year, China is growing 0.6 percentage points slower while India is an entire percentage point slower.

On the other hand, four G7 nations are set to grow faster than last year, which includes Germany making its comeback from its negative real GDP growth of -0.3% in 2023.

Faster Growth for BRICS than G7 Nations

Despite mostly lower growth forecasts in 2024 compared to 2023, BRICS nations still have a significantly higher average growth forecast at 3.6% compared to the G7 average of 1%.

While the G7 countries’ combined GDP is around $15 trillion greater than the BRICS nations, with continued higher growth rates and the potential to add more members, BRICS looks likely to overtake the G7 in economic size within two decades.

BRICS Expansion Stutters Before October 2024 Summit

BRICS’ recent expansion has stuttered slightly, as Argentina’s newly-elected president Javier Milei declined its invitation and Saudi Arabia clarified that the country is still considering its invitation and has not joined BRICS yet.

Even with these initial growing pains, South Africa’s Foreign Minister Naledi Pandor told reporters in February that 34 different countries have submitted applications to join the growing BRICS bloc.

Any changes to the group are likely to be announced leading up to or at the 2024 BRICS summit which takes place October 22-24 in Kazan, Russia.

Get the Full Analysis of the IMF’s Outlook on VC+

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