2018 trucking industry trends predict what’s to come in the economy
When was the last time you thought about truckers? For most of us, it’s probably the last time we encountered them on the highway. But did you know that the trucking industry is a key aspect and leading indicator of our economy?
In fact, 71 percent of domestic goods in the United States are hauled by trucks. And the trucking industry has long been a bellwether of the overall economy. Given certain trends are likely to carry over into other industries, it’s worth keeping an eye on 2018 trucking industry trends and not just on the road, but also in the boardroom and at the bank.
Taking action to combat talent-tight market
The trucking industry is currently strong, enjoying double-digit increases in revenue. But it’s also changing, which can be an indicator of developments to come in other industries. One of the biggest challenges it’s facing is an aging workforce and a shortage of new drivers to replace retiring drivers. Currently, the biggest hindrance to trucking companies’ growth is finding and keeping qualified drivers. To combat this, trucking companies are becoming more creative in how they attract and retain workers. Many are shortening their routes to allow more time at home for their drivers – and while this can be a drag on efficiency, the more flexible approach has shown to be helpful in attracting new workers, particularly millennials. Companies are also creating pilot programs to encourage high school students to join the industry. There is also a push to encourage women to enter the industry, both as drivers and as fleet managers. Finally, companies are investing in upgrades to the trucks in their fleet to make them more comfortable to lure much-needed drivers.
Mergers and acquisitions driving loan growth
As the trucking industry adjusts to operational changes, it’s also shifted its approach to financing. There hasn’t been much of an increase in loan demand, but there’s been a spike in M&A activity, which in turn has driven loan growth. Larger companies are buying middle-market to smaller firms to expand their driver base. In addition, private equity groups have become more active in the industry as they help companies add dedicated equipment to their fleets.
Factoring in factoring
Factoring provides flexible financing that is designed to grow and change with a trucking company giving them the flexibility to meet the demands of day-to-day operations today and in the future. Factoring allows a company to leverage outstanding accounts receivable, which then provides them with a cash infusion that can be used to meet immediate needs such as payroll.
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