LOUISVILLE, Kentucky. Finding drivers and better utilization of technologies to drive costs lowers are two of the key issues that small fleets continue to struggle with, according to results of a Bibby Financial Services survey of over 250 small fleets (under 100 trucks).
Mary Ann Hudson, executive vice president and managing director of Bibby Transportation Finance, announced some of the key findings during a presentation on March 28, 2019, at the Mid-American Trucking Show in Louisville, Kentucky.
“People sacrifice a lot to be in this industry; they sacrifice their time, they sacrifice their families, but trucking is the backbone of this [nation],” she said.
The survey, conducted January 1, 2019, through February 28, 2019, sought to gauge the pulse of the smaller trucking community. It found that 52 percent reported growth in their business and 38 percent said things are relatively stable. Additionally, 33 percent expect to grow their revenue between 11 percent and 25 percent over the next two years while another 25 percent believe growth under 10 percent is achievable.
Payment, though, is a trouble spot for these carriers. Sixty-six percent say they have lost contracts in the past, in part because customers are extending payment terms to as much as 120 days making it tough for the carriers to manage their daily expenses.
“This is very difficult on the business,” Hudson said, adding that smaller fleets generally don’t feel they have the leverage to demand quicker payment.
The size of the fleet makes a difference, she said, noting that those fleets operating between 5 and 100 trucks were more selective on their load choice.
“While the 1 to 5 trucks can’t do that,” Hudson said. “They need [to keep the truck rolling] so they are taking unprofitable loads.”
Smaller fleets are more likely to be taken advantage of by shippers assigning lengthy and complex terms and conditions. The survey found that 33 percent of respondents believe they have lost at least $10,000 because of strict term conditions.
“Reading the terms and conditions is time consuming and most agree they don’t do it unless they are a larger [entity],” Hudson said. “They just sign the sheet.”
When it comes to drivers, the size of the fleet doesn’t seem to matter. Sixty-six percent said finding quality drivers is a challenge and to retain them, they have had to raise pay per mile and/or improve benefits.
“They are offering benefits they’ve never offered before,” Hudson said. “I have a client in Kentucky that is now offering health care and dental care, and he’s never had to before to keep drivers, but it’s working.”
The marketplace is becoming more competitive as well. Nearly two-thirds of survey respondents say they have lost a load in the past 12 months because they were undercut on a bid.
Like their large fleet brethren, the smaller fleets believe technology is an answer. Overall, the fleets in favor of using technology believe they can drive costs down up to 30 percent through more effective use of it.
The top technology these fleets are eyeing is predictive maintenance programs that can help them keep their trucks on the road. More effective routing programs and fleet management systems are also being eyed by these fleets. Autonomous technologies did not register with these survey respondents.
“Technology is more like to be driving the books in the next couple of years rather than driving the truck,” Hudson said.