We analyzed 64,950 data points to discover how small trucking companies can succeed in the current market
We analyzed 64,950 data points over hundreds of studies to discover how new and established trucking companies can maximize their profits and avoid shutting down. Offering new technologies, supporting driver retention, and profiting from freelance positions are the key to success.
Specifically, we sought to investigate how modern technologies can impact small trucking companies, how they operate, and how they can improve.
References for this study are included, and the methods and procedures used to draw conclusions can be found in the attached Methods and Procedures PDF.
The numbers don’t lie, so let’s jump right in.
Our key findings are as follows:
- Freight revenues are expected to grow 53.65% by 2030
- Driver retention is a crucial aspect of success – 30% of drivers quit within 3 months – 50% leave by month 6
- How to avoid being in the 85-90% of startup trucking companies that fail
- Diversify your team to avoid doing everything yourself
- Save up to 30% on salaries by hiring freelancers
- Make the best of both worlds by having a flexible working space
Freight revenues expected to grow 53.8% by 2030
According to the American Trucking Associations Freight Transportation Forecast for 2019 to 2030, overall freight tonnage will increase to 20.6 billion tons by 2030, resulting in a 53.8% rise in revenues totaling $1.601 billion.[1] While this is excellent news for your bottom line, it also allows you to invest in ways to grow your business and keep your drivers happy.
It’s no secret that there is a nationwide driver shortage. This extra capital could be put towards raises for your drivers. The average driver’s yearly salary is $5,822 lower than the national average.[2] Even experienced drivers with higher salaries may think twice about remaining in the field after the mass layoffs during the pandemic, long stretches away from home, long working hours, and the risks associated with driving tractor-trailers.[3]
“When it comes to pay, most companies in this industry are very open about the gross payments and RPM they are offering. Strive to be a leader in this category, even if at first it doesn’t make sense on paper. If someone believes you have their best interest at heart, they will run through a wall for you. What you are offering money-wise is the first indicator of if you are in it for yourself or for your drivers.”[4]
30% of drivers quit within 3 months – 50% leave by month 6
We’ve covered that there is a driver shortage, but driver retention is another big problem in the trucking industry. A great way to combat this AND keep your drivers safe is to invest in electric and/or smart trucks for your fleet. Imagine the excitement of a driver when they get the most technologically up-to-date tool on the market to perform their job!
Smart semis are a great way to increase new truck drivers’ retention and help keep them safe. Smart semi-trucks offer safety measures like warnings when creeping out of lanes, multiple cameras to see all around the vehicle, and automatic braking to avoid crashes. Adaptive cruise control is another feature that keeps drivers safe in heavy traffic by accelerating and decelerating with the traffic flow. It also increases comfort, as they can shift positions or stretch in traffic jams without worrying about speed.
Depending on the weight, an electric semi-truck can drive 500+ miles before needing to be charged.[5] They’re relatively new, but keep an eye on these types of smart trucks, as they will undoubtedly become more and more efficient as time passes. Additionally, many electric semis have the added benefits of smart semis detailed above.
Make sure you don’t wait too long on this new technology – you want this to be a new incentive to drivers, not the expected norm.
85-90% of startup trucking companies fail
Additionally, in 2020, more than 3,140 trucking companies closed their doors for good.[3] Embracing safety technologies is another way to invest your profits and avoid being one of the above statistics. Keeping drivers happy is key to keeping your business’s doors open. In addition to increased pay, another way to show your drivers you care is to increase their personal safety.
Dashcams and apps for drivers are both great ways to help your employees stay safe. Dashcams protect them (and you) from lawsuits in the event of an accident that is not your driver’s fault. There are tons of ready-made apps that your drivers can use to facilitate communication. Some, like Samsara’s CoPilot app, consider the truck’s weight and dimensions to help navigate truck-friendly routes.
Don’t try to do everything yourself
We’ve already discussed the failure rate of trucking companies, but did you know that poor management is one of the top 5 reasons for failure?[6] Cutting costs by trying to manage drivers, getting new clients, doing your own accounting, and being a one-person customer service team is a surefire way to tank your business. While you save money in the short term, it’s much more likely to make you suffer in the long term.
Be honest with yourself: Do you have experience as a manager? An accountant? A customer service rep? Even if you do, evaluate that experience through the eyes of your clients and/or employees. Did you have a high turnover rate or any complaints against you? If any of these questions ring true, think about if you can do everything independently.
If you’re confident in your abilities, reach out to trusted friends, family, and former employers/employees for their honest opinion. People often overestimate their abilities. Having an outsider’s perspective can help you see your strengths and weaknesses more clearly. Once you’ve taken these steps, you’ll see that you need strong team members to help you succeed.
Hire freelancers to save a fortune
Save 20-30% annually by utilizing freelancer workers through websites like Upwork to get top talent without paying costs associated with full-time employees, like health insurance, retirement, Medicare, and Social Security.[7] There are highly talented people with the exact skill set you’re looking for in a price range you can afford. The added bonus? They’re specifically looking for what you have to offer – they’ll even compete for your position!
According to Forbes, freelancers are equivalent in skill, more productive, more engaged, and as satisfied as full-time employees.[8]
The best of both worlds
If you’re determined to have all your personnel in one place, consider a shared working space and a virtual phone line over a brick-and-mortar office, like those offered by Alliance Virtual Offices.
Having access to a shared working space offers the safety of being able to manage all your team members in person at a substantially lower price than a regular office. This also allows work from home options for your non-driver employees. Let them work from home for tasks that don’t need constant supervision but have some office hours to ensure everything is being done to your standards.
With Alliance’s services, you can also have access to a Live Receptionist for customers and distributors to call with any questions or issues. With this service, you don’t need to worry about constantly monitoring your phone or email during busy office hours. You can focus on day-to-day tasks without constant interruptions while knowing our professional staff will help filter important information.
Conclusion
We hope this study has helped inform you of how diversified ways of thinking and action can improve your trucking business.
If you’d like to know how we came to our conclusions, please check our sources below or look at the attached Methods and Procedures document.
Are you a small trucking business, a driver, looking to streamline or expand your small freight business? Please reach out to us on Facebook, Twitter, or contact us directly for more information.
