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A Tough Road Ahead for Small Trucking Companies without Capital
The demand for trucking companies has hit an all-time high as the economy has made a comeback. According to the Wall Street Journal, the trucking industry has grown 6.5% a year since 2009. This is great news for large carriers who can afford the new regulation costs but leaves small fleets wondering whether they will make it to see another year.
The Struggle for Small Trucking Companies
It is not news that the trucking industry has recently struggled to hire new drivers to keep up with trucking demands. Small trucking companies have tried to bring in drivers with incentives such as sign-on bonuses, raises, and the promise of being home more often. Freight companies are even making their job postings appealing to women in hopes of hiring a new generation of drivers. Many small carriers cannot afford to make these incentives a reality for drivers, especially with the upcoming e-log mandate.
Fleet owner, Jim Burg, says he hasn’t been able to purchase any new trucks because new vehicles cost 60% more than they did seven years ago. He also fears to offer drivers a sign-on bonus in case they take the money and quit immediately. His business has been at a standstill for the past three years, and he worries what the future will bring. Although, he does say that changing to (mostly) e-logs has brought benefits such as fewer driver citations.
Large Carriers Reap the Benefits
Large fleets are having no problem with purchasing hundreds of vehicles and providing drivers with the incentives they are hoping for. Many of them are already on board with the e-log mandate. While restrictions on driver hours and routes will pose as an issue for all trucking companies, the larger fleets are able to bribe drivers to stay, regardless of the negative response, the e-logs are receiving. Large trucking companies don’t have many complaints, knowing that if many small fleets fail, they can raise their costs to shippers.
The Financial Solution to Stay in Business
On the positive side, bankruptcies have dropped greatly as fuel costs have seen a significant drop. The trucking industry is still 89% small fleets, many of which don’t plan on going anywhere. If the high demand for carriers continues to increase, small carriers can bring their prices up.
Factor Finders puts full support on small businesses, and we don’t see retirement as an option for your trucking company. What if you could provide your drivers with incentives, afford the e-logs, purchase new vehicles, all while being debt-free? This is a reality that your small trucking company can see. Trucking factoring companies work with owner-operators to give them the money they need to expand with invoice factoring. Fuel advances, fuel cards, same day funding, and flat rates are just some of the many options that freight factoring companies can provide. You can get the funds you need within 24-hours, making it possible for you to grow. Give us a call before the October e-log mandate decision and see a difference in your bank account, just in time for the cross-over.
