The demands placed on the trucking industry last year opened the doors for smaller carriers to carve out a larger market share for themselves. Smaller carriers worked with shippers to haul loads along irregular routes and even offset some of the capacity strains that were causing a rift between larger carriers and their customers. To a degree, smaller carriers set in place a strategy to buffer themselves from the driver shortage facing the trucking industry while reducing turnover rates. No these smaller trucking companies are positioned for growth and will have an even more prominent presence this year.
Enticing Drivers with Higher Pay
Large carriers can make adjustments to handle the demands of shippers along with the current driver shortage. However, the impact has the potential of hitting smaller carriers harder. In order to combat this and bolster driver numbers, smaller trucking companies as a whole offered increased wages and even sign-on bonuses. This strategy paid off in multiple ways. Drivers were more willing to stick with smaller carriers, which in turn allowed those carriers to take on more business and bring in higher revenue. Additionally, drivers for smaller carriers were, for the most part, considered employees instead of contractors, which helped to build company loyalty and team pride.
The Future of Smaller Carriers
Overall growth for the trucking industry is expected to slow slightly compared to last year, though in all fairness 2018 was anomalous for a number of reasons including the aforementioned driver shortage, shippers accelerating their delivery schedules, ELDs, and other legislation. This breathing space has allowed smaller trucking companies to focus on how they want to position themselves in the industry, and to organize logistics better to handle the various shipping spikes throughout the year. Small carriers may end up being able to bridge the gap between shippers and large carriers to offset any future strains on supply chains.
Cash Flow Remains an Issue
Even with the tremendous progress small carriers have made, cash flow – as with carriers of all sizes – still remains an issue. Waiting on staggered payment schedules is still an obstacle preventing carriers from getting access to the revenue they need to grow their operations. Express Freight Finance is a national leader in freight load factoring services for trucking companies of all sizes. With 24-hour turnaround times on receivables, account tools, app support, and other benefits, carriers can eliminate waiting times and get fast access to cash for their receivables.
Contact Express Freight Finance today to get started.