The American Trucking Association just released some interesting data on the trucking industry that points to some positive performance and economic trends. Here are some highlights from their release:
- In 2014, trucks moved 9.96 billion tons, or 68.8%, of all domestic freight
- The $700.4 billion in revenue accounted for 80.3% of all freight transportation spending (this is the first time that trucking revenues have topped $700 billion)
- Trucking employed more than 7 million people, including 3.4 million drivers
- Combination trucks logged 168.4 billion miles in 2013, or an average of 69,000 per truck
- Since Deregulation, the number of registered motor carriers has grown by 68 times to more than 1.3 million carriers
- Commercial trucks paid $16.5 billion in federal highway user fees in 2013
These figures certainly point to positive signs in the trucking industry’s future, but transportation owners still have obstacles that need addressing; obstacles that can be exacerbated in a strong economy. One in particular is driver retention. The American Transportation Research Institutereleased a report late last year called Critical Issues in the Trucking Industry (Free PDF – registration required). In the report it highlighted several problem areas facing company owners and number four on the list was driver retention.
The report also provides some proposed strategies, all of which are sound and make sense for owners. They are… 1) help find ways to improve the work/life balance of truck drivers, 2) research the relationship between driver compensation models and driver productivity, and 3) study the effectiveness of carrier retention programs and financially incentivize drivers for safe driving performance.
All of these proposed solutions require money, and positive cash flow in particular is a big concern when funding these employee retention incentives. This is especially true for smaller transportation or freight company owners who are competing with the larger, industry players for truck drivers. These larger companies tend to naturally have deeper wallets and can afford higher salaries and compensation packages, but there are some areas in which smaller business owners can compete, and it’s here where they’ll need to focus.
In a recent blog we penned – 4 Things You Can Do Today To Grow Your Trucking or Transportation Business – one of the first things we focused on was delivering uncompromised service. To us, there’s a distinct parallel between delivering outstanding customer service and driver incentive programs. Rewarding drivers for productivity is great and rewarding them for helping you deliver unmatched customer service is even better. Productivity and happy clients are a formula for success! Delivering these incentives then becomes a matter of positive cash flow, and that’s where a company like eCapital and freight factoring solutions can come into play.
With freight factoring solutions, smaller business owners can better compete with their larger counterparts with regard to implementing incentives. Freight factoring solutions put your money into your hands faster since freight bills are often not paid until well after delivery. That’s okay if you’re a large transportation company, but if you’re a small to midsize fleet owner, this immediate cash can be used to fund these new incentive programs, helping your driver retention efforts.