Current demand for qualified over-the-road drivers for 18-wheelers and semi-trailer trucks is pushing salaries upward for experienced professionals in the transportation industry. As the economy recovers, more companies are looking to add drivers for their shipping and delivery routes. Finding those drivers, however, is becoming increasingly challenging due to a number of factors currently affecting the transportation industry.
Due to the recent economic downturns, many qualified over-the-road truck drivers have abandoned the industry to seek other opportunities. Others with many years of experience in the transportation field are nearing retirement age and are no longer available to accept routes or working responsibilities. As demand increases, the shortage is likely to entail greater expenditures by firms in the national trucking industry to obtain the services of qualified and experienced drivers for their transportation routes.
While the energy sector of the trucking industry has been among the hardest hit, other areas are experiencing similar problems in finding the right drivers for their needs. Specialty trucking firms are having serious difficulty in finding enough tank haul drivers to meet current needs. This has been exacerbated by a significant increase in the oil production of states like North Dakota, South Dakota and Texas and added traffic from the automotive and large equipment industries.
The Federal Motor Carrier Safety Administration (FMCSA) conducts compliance reviews that evaluate the safety standards in place for trucking companies. Maintaining the best possible lineup of drivers can help to ensure higher ratings under the Motor Carrier Safety Act and can even reduce the cost of insurance for companies that achieve consistent satisfactory ratings. Experienced and knowledgeable drivers are far less likely to be involved in accidents and are highly prized commodities in the current trucking industry.
New regulations that went into effect on July 1, 2013, are likely to increase demand and salaries for qualified drivers still more in the transportation industry. The new FMCSA rules require shorter periods of continuous driving, increased rest breaks and an overall reduction in the driving hours per week allowed for over-the-road truck drivers. The hours-of-service rules change is intended to reduce driver fatigue and to provide an added measure of safety on the road. The final rule to be enforced by the FMCSA includes the following provisions:
Experts in the trucking industry estimate that these changes will cost as much as $189 million annually. FMCSA’s own figures show a positive impact in improved driver health and reduced accidents of $133 million; however, that projected impact is unlikely to provide much comfort to trucking firms facing added labor costs and higher salaries for their driving staff.
Most trucking companies operate on fairly small profit margins and can quickly go into the red when faced with added expenses. Along with the increased demand and salary requirements for drivers, trucking firms currently face a number of other challenges that can significantly increase costs for their operations:
The combination of all these factors can create significant cash flow problems for modern trucking concerns.
To meet these ongoing operational costs, many companies are seeking added funding from traditional lending sources. Banks and other commercial lenders, however, have proven reluctant to risk funding smaller businesses in the aftermath of recent financial setbacks in the credit and housing markets. As a result, many trucking companies are finding it difficult to acquire the necessary funding to hire drivers, replace and repair trucks and manage other expenses. Alternative lending sources are a valuable resource for these firms and provide a ready source of cash to meet operational needs.
Companies like Commerce Commercial Credit offer invoice loans, purchase order funding and collateralized credit arrangements to help trucking firms stay solvent and competitive within their industry. Fast turnaround times and rapid disbursements make these loans and freight bill factoring arrangements a solid choice for companies with cash flow difficulties and for those that have been denied credit in the traditional lending marketplaces. Commerce Commercial Credit can help trucking firms manage increased costs and new challenges more effectively to maintain their position in the modern transportation marketplace.