Driver shortage, rising fuel and truck prices, a list of regulations that seems to get longer every day – it’s enough to make any trucking business owner’s head spin. Then again, every business comes with its own unique set of challenges. Today’s trucking industry also offers excitement, flexibility, and room for growth. For smart investors up for the challenge, long-term rewards still exist in the trucking business.
Every industry has to deal with changes in the business cycle. But while the quantity of products being transported through the country may ebb and flow with the economy, people and businesses will always need to move goods from point A to point B. In that sense, the trucking business has one of the most stable demands in the market.
The truck industry moves approximately 70 percent of all freight tonnage, according to the American Trucking Association. During the height of the recession, a large number of workers from hard-hit industries like construction actually switched to the trucking sector to find stable work. Of course, increasing rules and regulations have made certification harder for newcomers (hence the ongoing driver shortage). On the plus side, those with experience managing a trucking business enjoy a distinct advantage.
What does the future hold for trucking? Truck Driver Institute, Inc. reports that manufacturing is expected to grow in 2012, especially during the second half of the year. An increase in manufacturing means truckers will be delivering more raw materials and, as a result of manufacturing, more final goods.
It’s easy to focus on challenges like a lack of drivers. But while there may be fewer quality drivers available, there are also fewer transportation companies to share them with.
Trucking companies that overcome dips in the business cycle – or that enter the market now that the worst is over – may be in a position to reap real rewards. Many truck business owners opted to cut their losses and put their trucking business for sale over the last two years. Others downsized their fleets significantly. As a result, investors looking to buy a trucking company for sale or expand an existing company can take advantage of under-served customers and available capital.
Opportunities for Reinvestment
New trucks are significantly more expensive, thanks to greener engines designed to meet modern fuel efficiency standards. Purchasing new vehicles individually can be cost-prohibitive for small to medium truck businesses. But for those with the resources, acquiring an existing fleet can be a cost-efficient way to expand – especially when it comes to vehicles and equipment with new technology.
But while technology raises some costs, other innovations have been introduced with the intention of lowering costs. For instance, GPS tracking systems have been shown to offset rising fuel prices by optimizing routes, limiting speeds, and minimizing idling time.
The trucking business might be evolving, but it’s not going away. Investors and business owners in a position to acquire an existing truck business for sale may be able to take advantage of future opportunities at a substantial discount.