Trucking and logistics companies play an extremely significant role in running the economy of the country. By transporting freight from one end of the country to another, trucking and logistics companies handle almost seventy percent of the cargo in the US. As the market becomes more competitive and fuel prices continue to rise, the financial challenges for trucking and logistics companies have increased exponentially. To be sustainable and augment their bottom lines, trucking companies need to plan and stay abreast of looming challenges and threats.
Over the years, trucking and logistics companies have faced and overcome a wide range of financial challenges. Every year, new challenges are posed to these companies. Therefore, companies must continue to identify problems beforehand and effectively deal with them. Similarly, in 2018, trucking and logistics companies face the following financial challenges discussed below.
The Expected Increase in Fuel Prices
According to the forecast by bookkeeping experts who keep a keen eye on the global market, oil prices are expected to increase in 2018. The heightened tensions within the Middle East, particularly Saudi Arabia and the increasing conflict between Russia and the United States in Syria, have been identified as a catalyst for a spike in fuel prices. The political crisis leads to an increase in oil prices due to the uncertainty regarding the supply of oil. If the oil supply or production is adversely affected by any event, it directly impacts the oil prices in the global market. Therefore, considering the recent developments in the oil-rich middle-eastern region, a significant increase in oil prices is imminent.
As trucking and logistics companies rely heavily on fuel to carry out their daily operations, even a slight spike in diesel prices can pose a significant financial challenge. Therefore, fuel prices pose a potent economic threat to trucking companies in 2018.
Increase in Trucking Charges
Due to the increased costs of fuel, fleet maintenance, and driver wages, trucking companies are forced to change the rates they charge their customers for transporting their freight. An increase in prices can potentially drive away customers, forcing them to look for cheaper options. Holding onto their current market share can be a real financial challenge for trucking and logistics companies.
Cutting down costs to keep the freight charges is also quite impossible. The companies cannot control fuel prices or maintenance costs. Cutting down the wages of drivers is not feasible as drivers expect to be paid a fair wage for the services they render. In 2018, it will be a tremendous financial challenge for trucking companies to sustain their market share while changing the rates they charge their clients. Fortunately, with effective bookkeeping decisions, trucking and logistics companies can easily overcome this challenge.
Death of Workforce
A lack of a qualified and trained workforce is one of the most potent challenges faced by trucking companies. Without an adequate number of drivers to operate their fleet, trucking companies will not meet their deadlines and serve the ever-increasing number of clients.
According to experts who keep track of the industry’s trends, the trucking industry currently requires at least 30,000 more drivers to be sustainable. The lack of drivers is predicted to get worse with time. Acquiring such a significant number of drivers in a limited timescale is a severe challenge. If trucking and logistics companies fail to address this issue, it could potentially hamper their operations and ultimately affect the bottom line adversely.
Apart from those above three financial challenges, several other challenges, such as a capacity and trend shift towards less than truckload freight, which trucking companies had to deal with within 2018. To maintain a sustainable business model and continue to make profits, trucking and logistics companies need to take the forecasts into account and make smart decisions to overcome these financial challenges in 2018.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.