The middle broker takes money from both sides and it should disappear. But hold on, over the last 100 years of trucking those brokers become very powerful and very well connected and also we need to say they are doing their job perfectly. With them everything works and they are backed with billions of dollars in capital so is this change happen or it will just partially happen (only partial in my opinion).
6. USA Trucking Secret: There Is Big Truck Driver Shortage on The Labour Market
Yes, there is around 100.000 drivers missing in the trucking industry labour market. This creates a big mess on the market. Not only that there is lack of 100k drivers the thing is that there is a huge demand for well trained, responsible and good drivers.
This is constant problem in the last 10 years and a lot of discussions are opened on this subject without any good solution on the horizon. There is a huge industry in this driver training and driver hiring that is making a lot of money and would charge trucking company up to $3.000 if they find a driver to them.
The only solution for this situation is possible if the politics gets involved. Trucking industry needs decision where they could bring foreign drivers to the country and obtain them driving and working permits in fast and simple procedure. But then you open some immigration questions and that is always a hot politic topic. But if this is not solved trucking industry will not be able to answer the increase demand for transport.
7. USA Trucking Secret: Trucking Industry Is Not Very Profitable Business
This is another fact to handle. Being trucking company owner in the past would easily mean that you can make a ton of money and the profit per truck was really amazing. Also the average load price per mile were quite higher and the difference between costs and incomes were bigger.
But all those things have changed and now trucking company owners are heaving difficult time to cover all the cost they create. Also big problems are created because trucking has a low season during winter time were a lot of companies make debts that takes them 6 months to pay back during spring/summer high season.
8. USA Trucking Secret: There is a Lot of Competition
In the last 10 years there has been huge increase in truck numbers. A lot of new people entered into this business and also almost every trucking company expanded their fleet size.
Now if we now that a lot of trucks and trucking companies makes more competitive market landscape which as a consequence drives the load prices down. This is not something that is very easy to solve but the market power and invisible hand that controls the market is taking care of it.
You are able to see that in last 6 months more and more companies are unfortunately going out of business and file for bankruptcy just because there is a lot of trucks in the market. The cleaning of the market has started and I expect it to last for 6 months to a 1 year and that after that situation will get back to usual.
9. USA Trucking Secret: Freight Factoring Companies Make a Lot of Money
Also one of the giants in trucking industry that makes a lot of money. Usually the system works in a way that trucking company when delivers the load will get pay in 60 days. But trucking companies are not willing to wait for those 60 days and they want the money immediately within 5 days.
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Then they turn to the factoring companies that will pay them the money they need to get for the delivered load immediately. After that factoring company will chase the shipping company for the money and wait for 60 days. Of course they are not doing that for free. For paying you money within 5 days instead of they will usually charge you with 2% – 3% of the total bill.
There is a lot of companies that think this is unfair in some way but the truth is that no one is forcing trucking companies to use the factoring services. If you want money in advance you need to pay for it. It is that simple.
10. USA Trucking Secret: Dispatch Department Plays a Key Role
Another thing that most of the people outside of this industry doesn’t know is that dispatch department is something similar to the sales department in any other ordinary company. Dispatchers work every day to find new loads for all trucks any company owns.
If they are good trucking company will have good paid loads and company revenue goes up and if they are bad company revenues will shrink. This department is crucial because their bad performance can ruin the company within few months since the trucking business profit margins are very low.
As you were able to see there is a lot of things and trucking secrets that may look simple and that you might know all about them but once you go deeper you discover that this may not be the case and they you still need some extra information yo call your self an expert. This article wont make you an expert but it sure you show the way trucking industry works and what are the usual practices in the trucking business and it will reveal some of the trucking secrets to you.