With the increasing availability of Covid-19 vaccines, the US is opening up more and more. CDC recommendations are making room for vaccinated individuals and DOT (Department of Trasnportation) and FMCSA (Federal Motor Carrier Safety Administration) are following suit, lowering restrictions for team drivers even while maintaining the Emergency Declaration. The question now is: how can trucking businesses prepare for what’s coming?
Overall, a shift in the current status quo is good news for trucking companies. Much of trucking work is highly dependent upon the state of the economy, and the pandemic’s effects on transportation have not been ideal in an already precarious market. However, as more and more businesses and locations open up, freight demand for trucking companies will continue to grow.
What Trucking Business Owners Have Done So Far
When COVID-19 hit in 2020, daily operations for trucking businesses had to change quickly. Extra safety measures and sanitation have meant providing PPE (personal protective equipment), and altering processes to help truck drivers stay in the cab as much as possible. Beyond that, the exchange of paperwork and other documentation has been increasingly limited at pickup and delivery points, a trend that many companies are not likely to return to very soon.
Trucking companies have also been taking advantage of changing demand trends. In 2020, Nick Beck of Beck Trucking found that grocery shipping demand went up. Despite the well-known correlation between the state of the economy and shipping demand, Beck found that there has been “an influx of grocery store loads.” In the unique state of the pandemic, though overall demand went down, specific industries have been able to weather the storm more easily by providing key items where needs have increased.
Focusing on recession-proof specialty loads like meat, fresh product, and liquid loads like beverages or fuel can be an effective way for any trucking company to stay profitable. In the pandemic, it’s clear that small trucking companies can continue to utilize this tactic to outlast the effects of COVID-19.
Companies are also working to attract drivers with the intense shortage. Quarantine trends have led to workers finding more value in working from home and spending time with loved ones, but this is the opposite of ideal for trucking companies. CFR Rinkins, an international shipping company, has been working to attract members from broader demographics using social media and job boards to bring in younger drivers, women, and military veterans.
Smaller businesses may also benefit from reaching out to broader audiences to find personnel they need to take advantage of all possible opportunities during COVID-19.
Opportunities for Trucking Companies As the Economy Recovers
1. Optimizing Office Space
When it comes to trucking, COVID-19 has affected the industry much like others. With trucking businesses, as with other companies, more employees are working from home. Where provisions had to be made to keep the workplace moving, structures are now in place for non-driving transportation industry employees to stay productive off-site. While working from home is becoming increasingly available, it is also increasingly preferred by many.
While some business owners may fear a reduction in productivity having a workforce at home, remote work provides a unique opportunity to cut costs. Office spaces make up a considerable expense for many businesses. With some workers staying at home, small trucking businesses have the opportunity to downsize office spaces and reduce other office costs.
2. Attracting and Retaining Truck Drivers
As COVID-19 restrictions ease, a larger driver workforce will allow business owners to take on new job opportunities. Trucking companies in particular will be met with more demand as restrictions lift. With the trucking industry expected to grow at least 6%, a higher freight supply will support a larger workforce than may have been necessary in the pandemic. Business owners for trucking companies will be best equipped to take advantage of new transport opportunities with more drivers in their fleet.
Of course, part of growing a solid fleet will also mean assuring that current drivers are rewarded. During the pandemic, job scarcity and high layoffs led to a 12% drop in turnover during the pandemic. However, with restrictions lifting, higher demand in trucking companies will translate to demand in other industries as well, making it easier than ever for members of the workforce to switch companies or careers entirely. Business owners must keep their trucking business profitable by ensuring that safe drivers who can deliver on-time have the motivation to stay.
Coming out of pandemic restrictions and recovering from the repercussions of the pandemic may mean less than ideal circumstances for business owners to incentivize drivers new and old. In the world of trucking, the pandemic has made it the ideal time to utilize a working capital loan to main business cash flow. Working capital loans can help business owners gain the flexibility needed to boost a delivery fleet and take advantage of increasing opportunities only a larger fleet can unlock.
3. Preparing for a Boom
With restrictions lifting and trade opening up, the transportation industry is due for something of a boost as well. Opportunistic business owners will be looking at increasing their number of drivers, but along with that comes the need for a bigger fleet of vehicles as well. Certain new demands will not be available to take without the right supply of trucks.
The need for a bigger fleet applies to long-haul trucks, but when it comes to COVID-19 pandemic, last-mile operations have become a greater focus and are demanding greater attention. Last-mile deliveries have historically served lower profit margins than simpler long-haul deliveries, but with eCommerce booming more than ever before, specializing in the final leg of delivery can be a huge opportunity, especially for small businesses that may not meet as much competition from larger-scale trucking operations. Innovation and specialization here could lead to bigger and better opportunities than previously seen.
Expanding in last-mile operations may mean building up a different kind of fleet altogether, with smaller vehicles more effective for home deliveries. This is another opportunity that may not feel immediately accessible to small business owners with vehicles already available. However, equipment financing and leasing loans like National Funding provides can help handle the activation costs required to start taking advantage of last-mile earning potential.
As pandemic restrictions ease, trucking business owners will be met with many opportunities to expand. It will be vital to get ahead of this new business. Fortunately, National Funding’s small business loans can assist by providing the necessary funding to create flexibility for any trucking company. See how much your business qualifies for or speak to a loan specialist to get started. 888.733.2383