Markets
How Do Trucking Companies Make Money?
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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 Mile | Share of Expenses |
|---|---|---|
| Fuel | -$0.43 | 24% |
| Truck Payments | -$0.27 | 15% |
| Repairs | -$0.17 | 9% |
| Insurance Premiums | -$0.08 | 4% |
| Permits & Licenses | -$0.02 | 1% |
| Tires | -$0.04 | 2% |
| Tolls | -$0.03 | 2% |
| Driver Wage | -$0.60 | 33% |
| Driver Benefits | -$0.18 | 10% |
| Total Expenses | -$1.82 | 100% |
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.
Markets
The European Stock Market: Attractive Valuations Offer Opportunities
On average, the European stock market has valuations that are nearly 50% lower than U.S. valuations. But how can you access the market?
European Stock Market: Attractive Valuations Offer Opportunities
Europe is known for some established brands, from L’Oréal to Louis Vuitton. However, the European stock market offers additional opportunities that may be lesser known.
The above infographic, sponsored by STOXX, outlines why investors may want to consider European stocks.
Attractive Valuations
Compared to most North American and Asian markets, European stocks offer lower or comparable valuations.
| Index | Price-to-Earnings Ratio | Price-to-Book Ratio |
|---|---|---|
| EURO STOXX 50 | 14.9 | 2.2 |
| STOXX Europe 600 | 14.4 | 2 |
| U.S. | 25.9 | 4.7 |
| Canada | 16.1 | 1.8 |
| Japan | 15.4 | 1.6 |
| Asia Pacific ex. China | 17.1 | 1.8 |
Data as of February 29, 2024. See graphic for full index names. Ratios based on trailing 12 month financials. The price to earnings ratio excludes companies with negative earnings.
On average, European valuations are nearly 50% lower than U.S. valuations, potentially offering an affordable entry point for investors.
Research also shows that lower price ratios have historically led to higher long-term returns.
Market Movements Not Closely Connected
Over the last decade, the European stock market had low-to-moderate correlation with North American and Asian equities.
The below chart shows correlations from February 2014 to February 2024. A value closer to zero indicates low correlation, while a value of one would indicate that two regions are moving in perfect unison.
| EURO STOXX 50 | STOXX EUROPE 600 | U.S. | Canada | Japan | Asia Pacific ex. China |
|
|---|---|---|---|---|---|---|
| EURO STOXX 50 | 1.00 | 0.97 | 0.55 | 0.67 | 0.24 | 0.43 |
| STOXX EUROPE 600 | 1.00 | 0.56 | 0.71 | 0.28 | 0.48 | |
| U.S. | 1.00 | 0.73 | 0.12 | 0.25 | ||
| Canada | 1.00 | 0.22 | 0.40 | |||
| Japan | 1.00 | 0.88 | ||||
| Asia Pacific ex. China | 1.00 |
Data is based on daily USD returns.
European equities had relatively independent market movements from North American and Asian markets. One contributing factor could be the differing sector weights in each market. For instance, technology makes up a quarter of the U.S. market, but health care and industrials dominate the broader European market.
Ultimately, European equities can enhance portfolio diversification and have the potential to mitigate risk for investors.
Tracking the Market
For investors interested in European equities, STOXX offers a variety of flagship indices:
| Index | Description | Market Cap |
|---|---|---|
| STOXX Europe 600 | Pan-regional, broad market | €10.5T |
| STOXX Developed Europe | Pan-regional, broad-market | €9.9T |
| STOXX Europe 600 ESG-X | Pan-regional, broad market, sustainability focus | €9.7T |
| STOXX Europe 50 | Pan-regional, blue-chip | €5.1T |
| EURO STOXX 50 | Eurozone, blue-chip | €3.5T |
Data is as of February 29, 2024. Market cap is free float, which represents the shares that are readily available for public trading on stock exchanges.
The EURO STOXX 50 tracks the Eurozone’s biggest and most traded companies. It also underlies one of the world’s largest ranges of ETFs and mutual funds. As of November 2023, there were €27.3 billion in ETFs and €23.5B in mutual fund assets under management tracking the index.
“For the past 25 years, the EURO STOXX 50 has served as an accurate, reliable and tradable representation of the Eurozone equity market.”
— Axel Lomholt, General Manager at STOXX
Partnering with STOXX to Track the European Stock Market
Are you interested in European equities? STOXX can be a valuable partner:
- Comprehensive, liquid and investable ecosystem
- European heritage, global reach
- Highly sophisticated customization capabilities
- Open architecture approach to using data
- Close partnerships with clients
- Part of ISS STOXX and Deutsche Börse Group
With a full suite of indices, STOXX can help you benchmark against the European stock market.
Learn how STOXX’s European indices offer liquid and effective market access.
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