Did you know that there are over 500,000 carriers with 6 trucks or less? They account for 86% of all carriers in the US. In fact, over 95% of all carriers have fewer than 20 trucks. Truth is, small fleets are the backbone of the trucking industry. Expanding your trucking fleet is a great option with today’s freight environment.
A small trucking fleet can expand in two types of ways: physical or monetary. A physical expansion involves adding more trucks and drivers. Monetary expansions come in the form of higher-quality jobs, often requiring modern equipment or technology.
Ready For Expansion?
There are many benefits to expanding your trucking fleet when the time is right. Having more trucks means that money is still coming in and larger fleets have a higher profile, which can make it easier to attract drivers and provide expansive financing opportunities. Expanding your fleet can make sense in a variety of situations. A few of those situations include having to turn down work, mitigating maintenance expenses, and expanding or upgrading equipment.
Having To Turn Down Work: No one wants to lose a valuable client because they cannot meet their needs. Increasing the number of trucks to meet a client’s needs can strengthen the relationship and, in turn, allow for higher rates to be charged on your end.
Mitigating Maintenance Expenses: A one-truck operation loses its ability to make money whenever that truck is down. Larger fleets can cover down-unit repair costs with trucks still on the road.
Expanding or Upgrading Equipment: New trucks can lower overhead costs like fuel and maintenance while attracting drivers. Additions like specialized trailers can help fleets take on different loads, such as refrigerated or oversized shipments.
Financing Your Growing Business
Expansion comes at a price, but there are several ways to get the funds needed to succeed. Whether you’re looking to purchase new types of trucks, new tech, or hire new drivers, funding options are available. The two main types of financing options available are factoring and loans.
Factoring
If you’re looking to access cash without taking on debt, factoring is the way to go. Factoring is not a loan; it is just a quick payment for the work you’ve already done. Unlike loans, your credit history is almost irrelevant when getting approved. Factoring companies base your approval on the creditworthiness of your clients, not you.
Loans
A loan is a debt incurred by your business, and your credit will come into play. Short and medium-term installment loans vary in length from one year (short-term) to five years (medium-term). A business line of credit is another financing option. With a line of credit, borrowers can withdraw money as needed and pay back the interest and fees for what they borrow.
Acquiring More Trucks
Making the right decision on how to acquire more trucks and the condition of those trucks are two important factors when considering adding to your fleet. There are two options for getting new trucks for your fleet: buying or leasing.
Buying
Banks often offer equipment financing that is specifically for buying a truck. With an equipment loan, monthly payments are made on the principal and interest. Once the payments are complete, the truck is yours!
Leasing
The truck is yours to use while you make the monthly payments agreed to in the lease contract. Unlike buying a truck, the lease provider keeps the vehicle when a lease ends. In some cases, called a lease-purchase, you will own the truck once you satisfy the lease terms.
Hiring New Drivers
Adding drivers and keeping drivers in your fleet is complicated. With driver shortage being a major issue today, many carriers are having a difficult time finding drivers to fulfill capacity. To make an attempt at avoiding this issue, below are a few ways to hire and keep drivers.
Non-Traditional Drivers
Market your job searches towards different ethnicities, younger generations, and women. You could find a lot of success in filling seats with quality drivers.
Job Search Platforms
In addition to job boards, be sure to post openings on social media. There are millions of users on Facebook, TikTok, Instagram, and LinkedIn every day, many of whom could be ideal candidates.
Driver Pay
Offer higher pay compared to other carriers. This may be tough, but could be done either through a guaranteed salary or a signing bonus.
Benefits
Adding an excellent benefits package will not only help attract drivers, but it will also help keep them. Things like 401(k) ‘s, paid time off, and health insurance can bring in quality drivers.
If expanding your trucking fleet is your business goal, make sure it is done at the right time. Pushing the envelope too far can quickly get owner-operators and fleet owners in over their heads if they’re not careful. Practice controlled and calculated growth. Ask questions and gain as much industry and market knowledge before making major strategic decisions.
