The good times for the freight industry, the pandemic days, have come and gone. Shipping rates have fallen, operational costs have risen, and many carriers are feeling the pinch. As of October 2022, 15,000 trucking companies have shut down, and many more since then.

The term “capitulation” in the stock market refers to giving up hope and selling at a loss. In the Motor Carrier Business, it’s a similar story. Times were too tough for 15,000 trucking companies, and even established names like Yellow Freight have closed, putting thousands out of work.

So what can small motor carriers do to survive? Here’s a survival strategy:

1. Assessment

• Understand Your Expenses: Review operational costs, including maintenance, fuel prices, and other factors.
• Analyze Your Standing: Are you able to survive and pay yourself and cover expenses like truck maintenance?

2. Plan According to Your Situation

• Doing Well: Very few motor carriers are posting great numbers in August 2023, so if you’re one of them, congratulations.
• Surviving: If you have survival, and all expenses are paid with consistent work, keep going.
• Edgy: If money is too tight, and you’re juggling bills, it’s time to consider changes.
• Bad Situation: If things are bad, change is required.

3. Choose Your Path

• Head Above Water: Stay Independent if you see consistency and growth.
• Inconsistent or High Water: Consider contracting to a larger motor carrier or broker.
• Overwhelmed: Store the MC and work as an Owner-Operator as a transitional strategy.
• End of the Line: Capitulate if necessary. Close down, sell the truck, or do something else.

4. Avoid Mistakes and Embrace Weaknesses

• If your head is above water, find your weaknesses and work on them.
• If overwhelmed, reach out for help.
• If it’s time to go, double and triple-check. Many times, there is a way.

5. Curable Problems

• Wishful thinking. We wish the market would let us do what we used to do. With decent lanes and home time. But now, the market is uncooperative and to make a profit, one must cast a wider net, travel longer distances and stay out longer too.
• Uncontrolled costs.
  • Fuel is expensive. Modest changes in cost and miles per gallon can result in significant bottom-line improvements.
  • Repairs and maintenance cost management.
• Driver Problems
  • Improve hiring processes
  • Have contracts
  • Offer Support (see insurance strategy)
• Compliance and Safety Records
  • Training and software
  • Vigilance and corrective action

We see motor carriers who have mastered the business. If you “skipped” a step or two, revisit working with a good motor carrier / mentor / sponser, They exist, we know some of them.

Conclusion

Survival in these turbulent times requires a willingness to assess, plan, and act. Whether you choose to adapt, transition, or stay the course, the key is to be honest with yourself and willing to make the necessary changes.

At Hoffman Strategies, we’re here to support small motor carriers as they navigate these challenges. From personalized assessments to strategic planning, we offer the resources and insights needed to thrive in today’s market. Contact us today to get started.