Running and managing a successful trucking business is not easy; it comes with plenty of challenges that change every year as new trends arise. However, 2020 has been the most challenging year for most trucking companies.
The sole reason has been COVID-19—the global pandemic we are still in the grasp of. Because of COVID-19, businesses all over the world have been majorly affected. From rising fuel prices to environmental factors to government freight regulations, 2020 has presented several struggles for the entire trucking industry.
The challenges faced by the trucking industry in 2019 have been overshadowed by the pandemic-stricken 2020. Not only the trucking industry, but the entire transportation industry has suffered from huge financial losses due to the global pandemic.
Air travel has been hit hard. On the other hand, road transport and logistics firms have faced unprecedented challenges such as border crossing closures and incessant delays to the entire supply chains drying up.
These challenges have affected all trucking businesses, including small and large-scale. In such an unfortunate situation, the only thing that has helped trucking companies is the adoption of technology, especially an advanced TMS solution such as LoadStop (loadstop.com/cloud-based-tms-software.)
In this blog post, we have compiled the top challenges faced by the trucking companies and how they can possibly overcome them.
Government Regulations
All trucking companies, regardless of their size, must adhere to various regulations imposed by federal, state, and local authorities. These regulations usually include electronic logging devices (ELD), minimum wage requirements, hours of service (HOS), and driver eligibility requirements.
Normally, the government dictates almost all the operations of the trucking business. No trucking business can operate on its own or follow its rules. It must adhere to government regulations.
For this reason, all truck owners should keep an eye on new regulations and amendments to the previous regulations. Such amendments can create a lot of expense and red tape for drivers, whether local drivers or long-haul drivers.
Fuel Costs
Fluctuating fuel prices is one of the biggest challenges for every trucking company. Trucking companies have to keep up with rising fuel costs. Due to this reason, truck owners work hard to improve fuel efficiency.
On the other hand, trucking companies are also largely affected by a huge spike in vehicle costs and increased shipping costs for certain time-sensitive products. Trucking companies need to implement strategic planning regarding fuel prices. If there is no planning, companies would have to increase their prices or incur major financial losses.
Driver Shortage and Retention
Another major challenge faced by most trucking companies is driver shortage and retention. Introducing new laws and regulations regarding driver recruitment exposes the trucking business to the constant threat of losing drivers.
Furthermore, the hiring process is so exhaustive and rigid that it demands a bigger investment in hiring methods. As a result, trucking companies must plan an effective strategy to retain their truck drivers with the expected shortage of drivers in the market.
Cash Flow
It is essential for trucking businesses to maintain steady cash flow for smooth and seamless business operations. However, the increased waiting time for a trucking company’s payment can relatively slow down the growth and cash flow.
Fortunately, freight factoring helps trucking companies eradicate the lag between payments. Freight factoring allows trucking companies to grow their capital reserves and use the same for hiring truck drivers and expanding operations into new areas.
Digital Transformations
Undoubtedly, a trucking company can undergo major digital transformation by adopting technology. In the past, the trucking industry has largely benefited by digitizing its business operations. Trucking companies use technological methods such as location tracking, real-time monitoring, logging of driver’s hours of service (HOS), and several other processes.
It is imperative for trucking companies to reshape their business strategies according to the latest trends in technology. Trucking companies can gain a competitive edge in the market by overcoming this particular challenge.
On the contrary, failing to adopt the latest technology can result in the trucking company in lesser business opportunities and hence fewer profits.
Environmental Concerns
The transportation industry poses a serious threat to air pollution. In fact, among the biggest contributors to air pollution are the various means of transporting goods, including trucks. Subsequently, the trucking industry is partially responsible for drastic climate change and global warming.
We already know that trucking is not an environmentally friendly industry as it heavily depends on diesel and gasoline for its operations. Also, the industry won’t be able to change its operations instantaneously.
However, as a truck owner, you can opt for more sustainable and greener alternatives. This can be done by investing in and utilizing green transport technologies.
Customer Expectations
The reason why digitizing the operations of the trucking industry is important is because it helps in meeting customer expectations. In fact, the digitization of business operations is much more than generating more income.
Thanks to advanced technology, customers access information whenever they want. They also expect carriers to keep them informed throughout the entire shipping and delivery process.
The trucking industry must keep up with the latest technology trends to provide its customers with a better experience and create consumer trust.
Driver Health and Safety
Drivers are the backbone of the trucking business. Hence, trucking companies need to pay more attention towards driver health and safety. The safer and healthier truck drivers are, the better they can deliver goods on time.
Truck drivers can remain on job for a maximum of 11 hours a day. If they stay longer, they will likely compromise their health and safety. On the other hand, truck owners should also consider investing in health insurance for their drivers. They should also encourage business strategies to improve driver health and fitness.
In addition, trucking companies should invest in safety sensor technology as it helps reduce road accidents and injuries. That way, trucking companies can keep their drivers healthy and safe.
Overcoming the Challenges
With perseverance and strong determination, the trucking industry can overcome the current challenges. Additionally, adopting advanced technology such as fleet management solutions can help trucking companies overcome their challenges.
Transportation management systems (TMS) and telematics also help trucking companies improve operational efficiency, reduce fuel prices, and increase revenue.
