Keeping Your Trucking Business Running During Economic Uncertainty

Sean Hawley

In the trucking world, it’s not always smooth driving. With the COVID-19 pandemic now in the rear view mirror, we assumed things would get easier. In some cases they have, but the trucking industry is still facing lots of uncertainty and pain. Unpredictable fuel prices, equipment costs/delays, and less overall freight demand continue to cause pain within the trucking industry. Most recently, lenders are starting to label trucking as a high risk industry (even SBA lenders), which is greatly affecting borrowing power. And as usual, the little guys feel it the worst.

Watch Your Money

Having seen the financials for literally hundreds of truckers over the years, it is my experience that truckers, as a whole, aren’t the world’s greatest money managers. This isn’t a dig, it’s just a fact based on a lot of experience. One of my tasks as a consultant is to review bank statements when working on loan applications. It is quite common to see all sorts of debits and charges that are unnecessary and wasteful. When times are lean, 3 five-dollar coffees from Starbucks a day is a bad idea.

Keep a Close Eye on Cash. Not just Starbucks, everything. You need to know where every dollar is coming from and going. For starters, don’t co-mingle your personal expenses from your business expenses (this also screws you up at tax time). Take some time and review your bank statements with a fine toothed come. If you don’t really have the time or you know you will never do it, get a bookkeeper.

Reduce Costs. Now might be the time to call your factoring company or insurance agent and see if they can do better on what they are charging you. If you’ve been in business for longer than 2 years you should be doing this anyway, every year. And don’t be afraid to look around for entirely new venders for the above or other services you must have.

Try Diversifying Your Freight Type. Use your current equipment for different types of freight. If possible, try adding an additional vehicle to dedicate using for another freight type altogether. BLF has lots of trucking clients who have different types of vehicles in their fleet. If freight is hard to come by for your reefer, but you also have a few box trucks, you will be able to bring revenue in that way.

Find Other Revenue Streams

As business owners, doing something to earn revenue for anything that doesn’t align with our original dream or idea can sometimes make us feel like we have failed. But a hallmark of all successful business owners is the ability to adapt. Inherent in this ability is also the vision to see when the current roadmap needs tweaking. Luckily for truckers, they have a lot they can do that is directly or indirectly tied to what they do already. Sometimes this can be a blessing (did you know that BLF didn’t start out as a trucking consulting company?)

Try Diversifying Your Freight Type. Use your current equipment for different types of freight. If possible, try adding an additional vehicle to dedicate using for another freight type altogether. BLF has lots of trucking clients who have different types of vehicles in their fleet. If freight is hard to come by for your reefer, but you also have a few box trucks, you will be able to bring revenue in that way.

Lease Your Equipment. Leasing out equipment can be a lucrative option for truckers during slow periods. By renting out your truck(s) or trailer(s) to other businesses or truckers in need, you will be generating income ensuring your assets aren’t sitting idle. Doing this will require a) making sure you have vetted whoever you are leasing to b) maintaining the equipment in good condition and c) setting clear lease terms to protect both parties involved. And don’t let pride deter you either-who cares that trucker you trained ten years ago has contracts and is crushing it? Call yourself an entrepreneur if it makes you feel better.

Partner Up. There’s strength in numbers. Truckers know lots of other truckers. Perhaps you are acquainted with one you might want to work with. This can be helpful for combining resources like equipment, contracts and drivers. And if you haul different types of freight even better. Each partner can be responsible for their own ‘division’, and at the same time share in some of the revenue at a pre-arranged percentage.

Get an Additional Job. This pointer comes from my own personal experience. During COVID-19, BLF was struggling along with most other businesses. At first I was trying every which way to bring money into the company but it wasn’t happening. I decided (after beating myself a lot) to learn how to do graphic design. This provided me with a whole new source of income. In fact, I found that I enjoyed the work very much and still do it. It also taught me skills I now use at my main job as CEO for Bright Light Freight (this article is the perfect example). Don’t be afraid to go out of your comfort zone. And don’t think it means the end of your main gig because it won’t.

Work On Your Credit

Although it’s always a good time to work on your credit, it’s time consuming and requires some effort to learn how. If you find yourself with a full day (or more) per week when your not out on the road, even if this is temporary, do yourself (and your business) a favor and work on getting your credit in good shape. A LOT of truckers have banged up credit profiles (see here), and this effects their business every single day. A lousy credit profile results in higher insurance premiums and factor rates, limits the ability to get dedicated contracts, and more than anything-greatly affects a trucker’s ability to get a loan or a line of credit.

Personal Credit. Use your current equipment for different types of freight. If possible, try adding an additional vehicle to dedicate using for another freight type altogether. BLF has lots of trucking clients who have different types of vehicles in their fleet. If freight is hard to come by for your reefer, but you also have a few box trucks, you will be able to bring revenue in that way.

Business Credit. If you have any plans whatsoever of growing your business in the future, its imperative that you have a good business credit profile. If you don’t have one you can start right now here and it won’t cost you anything (just be sure you don’t sign up for any of the extra services, they are unnecessary). Below are the first steps you’ll need to take to establish business credit:

Make sure you have an EIN for your LLC.
Get a DUNS number.
If possible, use a separate address for your business (the UPS Store is great for this)
Get a business phone number
If you don’t have one already, create a business website.
Apply for starter credit cards using your EIN. Home Depot and even Quill and Uline and good places to start, and you can go from there. Leave your personal SSN off the applications.
Make sure you check it often at Experian. It will cost $39.95 one time (it’s worth it). See below:

**It’s a Marathon, Not a Sprint**

Owning a business is a long term endeavor. And it’s always good to remember this when we are currently going through difficult times. Try not to obsess over where you are right now. This is easier said than done when ‘right now’ is so glum and uncertain. Take some time to look at where you have come from and where you want to be in 3 months, 6 months, 1 or 2 years. It will put things in a healthier perspective which will provide you with some clarity. The loans will come, fuel prices will eventually improve, and the trucking industry, of which you a part of, will continue its course.