Technological innovations typically help businesses save money. In the trucking industry, however, business owners have a tendency to focus on the expense of new technology.
It makes sense. Investing in a $70,000 truck is a lot more challenging than, say, investing in a few new computers. It doesn’t help when technology is being pushed on trucking business owners by federal regulators. By some estimates, trucks built to comply with new rules for fuel consumption and emissions reduction could cost an additional $6,000 or more, according to Overdrive Magazine. More complicated electronics means that repair costs will be more expensive as well.
But every cloud has its silver lining. It’s also estimated that new fuel and emissions standards will save $73,000 in fuel costs over each new truck’s lifespan, offsetting much of the initial cost increase. Technological upgrades that seem out of reach today will eventually be the norm. Transportation companies that can swallow the costs now will have an edge over competitors that aren’t so quick to adapt.
Efficiency and Performance
Fuel costs have always been a wild card for trucking business owners. Today, both big carriers and small owner-operators are benefiting from the increased efficiency that comes with modern technologies. While expensive, newer and cleaner engines have improved gas mileage and dependability. Fuel efficiency is also being improved through the use of speed governors, tire pressure monitoring, GPS, aerodynamic devices, and idle reduction technology.
Technology is also helping companies contend with strict safety regulations. Electronic logs simplify the tracking of hours, reducing the risk of expensive hours-of-service violations. On-board electronics allow management to identify drivers who repeatedly cause problems, ensuring that companies spend energy and resources on only the most qualified employees.
Appeal to New Drivers
As baby boomers put their trucking companies for sale and retire from the market, carriers must replace them with younger drivers. The Internet is a crucial tool for recruiting the next generation. Savvy trucking companies are using Facebook to connect and communicate with drivers and are implementing software programs that allow drivers to compare safety scores. The trucking business has one of the highest turnover rates of any industry. Social networking is helping truck business owners track employee satisfaction – one of the cornerstones of driver retention. The same programs that streamline routes and track hours also help attract young drivers, who expect their employers to use the latest technology.
Naturally, larger trucking companies will be less impacted by the cost of technology. Bigger fleets are expected to continue buying up small trucking companies for sale, leading to greater overall consolidation. Finding success as an independent carrier or freight brokerage company will be challenging but not impossible. Businesses may be able to lower costs by developing a specialty niche, such as local or refrigerated transportation, or by participating in mergers in the trucking industry in order to better compete with conglomerates.
The technology in which owners invest can make or break the future of a trucking business. Whether you decide to pursue value-enhancing investments or put your truck business for sale, experienced truck business brokers can ensure you get the best possible return.