It is no secret that the economy is in the doldrums. We are entering an economic recession that is worse than what we saw in 2008. In fact, you’re probably reeling from the impact of losing a job or closing down a business.
That begs the question: should you invest in a business right now? What kind of business is worth investing in during this time?
Starting, managing, and even investing in a trucking business is a huge decision to make. After all, in the past, only 15% of small trucking business owners survived the first year.
The high and fluctuating cost of fuel, as well as driver’s compensation, are some culprits to why the trucking business is not anyone’s favorite investment. That and, of course, the number of accidents that happen daily.
But that doesn’t mean that you should stay away from this industry. The National Association of Small Trucking Companies said that trucking businesses are profitable if you know how to run the business efficiently.
The rate of small trucking businesses failing has been steadily decreasing in the past 30 years. With more technology and tools to help truckers and truck owners, you can definitely make a ton of money investing in this kind of business.
What Kind of Trucking Business Is the Most Profitable?
There are many types of the trucking business. It almost seems impossible to choose just one. This year, experts said that the most lucrative types of trucking are liquid hauling, oversized loads, mining industry trucking, and luxury car hauling.
But have you checked out whatfull-load transport is in trucking? It’s an end-to-end kind of trucking service wherein the transport company delivers the truck to the shipper, which fills it up. The company will then transport the truck to the specified location.
It is a popular and profitable trucking business. If you are in the market for a trucking investment, full-load trucking might be the best option for you.
More Safety Precautions Are in Place
Trucking jobs are much safer today. This means that as a company, you are less at risk of being answerable to what happens to your drivers. There are more safety precautions in place today than five to 10 years ago.
In fact, by the end of 2017, the industry digitalized its driving time limits on long-haul truck drivers and commercial truck drivers.
This means that they cannot stay on the road for longer than the limit because of driver fatigue. Up until December 2017, companies used paper logbooks. But these are inexact, and they can be misleading.
Today, the whole trucking industry moved to an electronic system where schedules are synchronized.
As a business owner, you can monitor the progress of your drivers through this system. There are fewer risks involved today than in the past decade. This makes the trucking industry a viable investment option.
Driver Compensation Is Justified
The reason why many investors turn away from the trucking business is because of the rising cost of fuel. But a 2011 report said that the biggest operational cost of trucking is the wages of the drivers. This is a good thing for the industry because compensating the drivers well will lead to an increase in productivity.
On average, long-haul truck drivers make about $40,000 a year. Operators can make as much as $180,000 annually. Compensating truck drivers well reinforces them to provide good service to clients. It will also empower the company to retain its best drivers.
Evaluating the profitability of a business is not dependent on freight rates and competition alone. It should also provide excellent customer service. That begins with paying the drivers the right wages.
Fuel Is Cheaper
Fuel prices in the US are lower compared to other countries. It’s an energy-rich country wherein the government spends billions of dollars to subsidize the cost of fuel. Trucking businesses benefit from these subsidies, too.
The US market is also dependent on the trucking and cargo business.
Small to medium to large companies depend on hauling services to deliver their products to different locations. The trucking industry carries on its shoulder the weight of the US economy.
But the good thing is that the US government has been historically supportive of this industry-from subsidizing fuel prices to fairer wages to safety protocols to mental health.
If you are thinking of entering any industry right now, the trucking business has great potential. Even amid the coronavirus pandemic, the trucking industry is a stable and profitable industry.
The laws governing it have also improved. This is something that investors can take advantage of.