Start Up Staffing Agency
IT Staffing Florida
In order to operate a profitable trucking business, you need to employ and retain the best drivers. Unfortunately, it can be difficult to do that when you trucking company is in the midst of a cash flow crisis. This is a common problem in the trucking industry, especially when you are trying to keep customers happy at the same time. In order to do so, you need to allow them time to pay their unpaid freight bills in full. Like the respondents of the survey, you probably feel pressure to offer generous credit terms and keep your prices as low as possible. It can be difficult to maintain this balance while trying to do what is right for your own company.
The good news is that 1st Commercial Credit is a company that lends on freight bills. You can get the cash your trucking company needs in the form of an accounts receivable loan by submitting one or more unpaid invoices to our company for factoring. It is easier than getting a loan through a bank or a business credit card because we don't rely on your company's credit history to make a lending decision. We only look at the amount of the money that your trucking business is owed.
At 1st Commercial Credit, we can advance you up to 10 million dollars based on the invoice value and credit worthiness of your customer. This gives you the cash you need to ensure that you can hire the safest, most experienced drivers and keep your trucks on the road.
Trucking Industry Challenges Identified
According to a report released by the United States Bureau of Labor Statistics (BLS) in 2012, more than 70 percent of the things Americans wear or use at school, home or work was initially hauled by a truck. Food is also included in this calculation, as well as the raw materials needed to make all of these goods. If you are the owner of a trucking company, it is reassuring to know that the demand for your company's services is not something that is expected to go away. However, it can also be a challenge to keep your current customers and employees happy while continually attracting new ones.
In September 2012, a magazine called Inbound Logistics conducted an extensive survey with people in the trucking industry to identify its key challenges. Not surprisingly, the number one concern of truckers is the ever-increasing cost of fuel.
When gas prices are high, it has a trickle-down effect on the rest of the industry. It cuts into profits, which in turn forces trucking companies to pass along the expense to their customers. As a result of the higher prices, some customers cancel orders to have their goods hauled while others shop around for a trucking company that can do it for less.
Some Good News
High fuel costs notwithstanding, there is some good news to come out of the country's recent recession. The trucking industry emerged stronger than it has ever been in the past. The 2012 Inbound Logistics report indicates that trucking companies that survived the recession have implemented the following changes since that time:
One of the biggest bright spots to come out of the economic recovery period is that owners of trucking companies are increasing fleet sizes to pre-recession levels. Before the recession was officially declared in 2007, the average fleet size was 2,946 units. The numbers dropped in the next few years before reaching an average fleet size of 2,542 units in 2011. The average fleet size for the trucking industry as a whole was 2,988 in 2012, surpassing the level it was at before the recession hit.
There is no doubt that the recession taught owner-operators and trucking company owners to run their operations more efficiently. The Inbound Logistics report indicated that more owners than ever are making due with older equipment. The average number of trailers in 2010 was 7,041. It was 6,782 in 2011 and 6,643 in 2012. Trucking company owners have also become more efficient with retaining assets and collecting money that is due to them.
Shortage of Qualified Truck Drivers
While the trucking industry can save money by being smarter about fuel consumption and maintaining fleets better, there is simply no substitute for experienced drivers. In 2011, trucking companies reported an average of 3,024 drivers, including owner-operators. The average dropped to 2,507 by the following year. As a result, most trucking carriers in the United States have made driver recruitment and retention a top priority. Of the trucking company owners who responded to the survey, 81 percent indicated that driver-related costs were now their primary concern.
Other Concerns of Trucking Company Owners
In the 2012 survey, both carriers and shippers were asked to name their top concerns with the trucking industry. After driver-related costs, carriers indicated the following concerns:
For shippers, the primary goal remains to reduce transportation costs. This concern was listed first among 86 percent of the respondents. Additional challenges faced by shippers in the trucking industry include: