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REASONS MANY TRUCKING COMPANIES CONTINUE TO FAIL 

June 16, 2022 0Permitstruck businessTrucking

Running a trucking company can be rewarding, but it is not for everyone. People come into this industry with unrealistic expectations to be successful in months. Forgetting there are certain precautions and practices you need to adhere to attain success.

According to reports, more than 500 trucking companies went under in 2019. This trend is said to be caused by unfavorable conditions for new companies in the trucking industry. But the failure of established firms has pointed to other causes.

Trucking companies face risks day in and day out, especially if they are new to the landscape of operation. But these are avoidable with proper planning and having the right help in your corner. Therefore, knowing the common reasons other trucking companies fail can help you prevent being one of them.

In this blog, Global Multi Services gives you a hand-up on the industry by covering why trucking companies continue to fail.

LACK OF PLANNING 

Starting a business is rewarding and life-changing. However, a proper business plan is imperative to its success. Every trucking company needs a firm foundation to build strategies and techniques to operate efficiently. Running a trucking business is the same as running other businesses. But the industry has many state and federal regulations with a unique client base.

Failing to factor them into your business plan may haunt your business later. Therefore, you need thorough research and a plan to build a good foundation. Having a business plan also helps you brace for any possible contingencies. Hence, take time to create your business blueprint and, if possible, involve a corporate attorney. Understand your client base, know the market, and calculate weight surcharges.

UNSKILLED MANAGEMENT 

Sales activities take place outside the business premises for trucking companies. Therefore, a managerial effort is required to keep track of all the drivers on the road. They also ensure the freight arrives on time and in perfect condition. So, employ a management team to keep track of money flow, bills, operations, and more.

Managers are one of the most important aspects of a business operation, and unskilled managers scare off good employees, making them leave. Therefore, your management team must have qualifications and experience. That way, you will be surrounded by a knowledgeable team with a nodding acquaintance with business success.

CASH FLOW PROBLEM 

Starting a trucking business without considering your cash flow is one of the biggest mistakes business owners make. The cash-flow issue is a combination of many factors. These include low-paying freight, high costs of operations, too many unpaid invoices, etc. Also, clients often take up to two months to pay their invoices, and the trucking company has to cover the costs with its money. To ensure business operations go on, the company needs to foot utility bills, pay employees, build inventory, pay suppliers, get more clients, and cover tax expenses. So, lay out strategies to manage your cash flow with the help of a business management service.

COMPLIANCE ISSUE

Staying compliant is paramount for trucking companies operating across the United States. The Federal Motor Carrier Safety Administration encourages safe driving and ensures they follow the required regulations. These include obtaining permits, licenses, DOT Compliance, maintenance, etc. Also, every state has its requirements depending on freight, truck weight, and the distance traveled. Failure to adhere to these regulations can lead to fines, penalties, license revocation, or shutdown.

TO SUM IT UP 

The trucking industry is competitive, and you can only be successful with a comprehensive business plan while identifying and exploiting available market gaps. Do thorough research and avoid unnecessary mistakes. Stick to your plans and learn from your predecessors to be successful.

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GROWING TRENDS IN THE TRUCKING INDUSTRY IN 2022

June 6, 2022 0truck businessTrucking

The trucking industry plays a significant role in the United States economy and ensures businesses operate. It is also one of the most extensive revenue streams, hauling above 8 billion tons of goods every year. These account for nearly three-quarters of all goods transported in the United States.

The trucking industry is a vital source of job opportunities, and millions of drivers depend on it to provide for their families. But the turmoil of the past years has caused tremendous changes with shifts in demand, a changing workforce, and new legislation. These have impacted its overall production and development. However, it is safe to say various factors have influenced how the industry functions and different elements have changed how work gets done within this industry.

Keep reading as we explore growing trends affecting the trucking industry throughout 2022.

DEVELOPMENT OF TECHNOLOGY

Technology development has caused widespread improvements in several industries, and the trucking industry is not an exception. Trucking companies are beginning to employ several software programs to help make their operations more efficient and streamlined. Trucks are now equipped with better technology to improve functionality.

These technologies make it easier to track trucks in real-time and empower trucking companies to create streamlined routing. Additionally, AI and machine learning create intelligent predictions, allowing them to make proactive decisions. These changes are likely to increase, and trucking companies will respond better to what it brings.

GROWING FUEL COST

Over the years, fuel costs have steadily risen after hitting low in the pandemic in early 2020. These have impacted the trucking industry and pushed freight rates higher. Fuel costs have always been a significant percentage of overall operating expenses for every trucking company. Additionally, the fuel industry is constantly undergoing fluctuations in market prices due to supply and demand. Today, many trucking companies are opting for other alternatives. These include electric trucks and many more to cut their daily costs. But they need to invest, which is an expense many trucking companies currently cannot incur. However, if the fuel industry experiences a positive growth rate, fuel prices can return to where they were before the decline began.

HIGHER NUMBER OF MERGERS

Many trucking companies went out of business due to pandemics, poor management, and operating administration. And many of them are choosing to go down the alternative route by merging with other companies. According to statistics, others are likely to move in this direction in 2022 if the market does not improve.

Some are merging with existing trucking companies to pool their resources together to withstand the market. Others are uniting with companies from other sectors to expand the range of services they can provide. These allow them to continue their operations and expand to newer territories. It will also help them stay afloat until the market is favorable. Additionally, it adds new efficiencies and eliminates inefficiencies throughout the industry.

INFLUENCE OF URBANIZATION

The growth of urbanization is one of the developments the trucking industry benefited from over the past years. Rural areas are experiencing wide-scale development into urban landscapes, making it easier for trucks to travel through paths they could not. These have widened trucking companies’ customer base and helped them generate more business.

SUBSTANTIAL GROWTH WITH E-COMMERCE INFLUENCE

The e-commerce industry has grown tremendously after the pandemic. Many people prefer to order online from the comfort of their homes instead of visiting a store or showroom. These have made this industry bloom and have helped it become one of the most successful. However, the industry cannot function without the help of the trucking industry. They depend on truckers to get their goods from one place to another. Therefore, the continuous growth in the e-commerce industry is also improving the trucking industry.

With this growth comes both opportunity and challenges. Trucking companies will have ample ability to expand their services. But they will face high fuel costs, a strained supply of fleets, and driver shortages. To deal with the situation, they must be willing to be innovative in their approach to increasing hauls while addressing ongoing supply chain issues.

DRIVER SHORTAGE

The trucking industry has struggled with driver shortages for many years. Many older drivers are retiring without replacement. The hiring pool for specialized drivers is dwindling, and many drivers now prioritize quick, thorough, and well-paid carriers. The lack of better pay and long hours on the road every time is now discouraging as many drivers miss spending valuable time with their friends and family. The job also has a high risk of accidents and strict regulations.

HIGHER FREIGHT VOLUME

The demand for trucking services is not likely to slow down anytime soon. According to reports from the American Trucking Association, the national trucking freight volume has increased by more than 60% in 2022. Industry revenue and efficiency have also increased due to new technologies.