Trucking and logistics companies are highly significant in running the country’s economy. 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 competitive and fuel prices continue to rise, the financial challenges for trucking and logistics companies have increased exponentially. Trucking companies need to plan and stay abreast of looming challenges and threats to be sustainable and augment their bottom lines.
Over the years, trucking and logistics companies have faced and overcome various financial challenges. Every year, new challenges are posed to these companies. Therefore, companies must continue identifying problems beforehand and effectively dealing with them. Similarly, in 2018, trucking and logistics companies faced 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 led to increased oil prices due to the uncertainty regarding oil supply. 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 fuel costs, fleet maintenance, and driver wages, trucking companies are forced to change the rates they charge their customers for transporting their freight. Price increases 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 drivers’ wages is not feasible as drivers expect to be paid a fair wage for their services. 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 trucking companies face. Trucking companies will not meet their deadlines and serve the ever-increasing number of clients without an adequate number of drivers to operate their fleet.
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 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 adversely affect the bottom line.
In summary, trucking and logistics companies are integral to the US economy, yet they face significant financial challenges in 2018. These challenges include an anticipated rise in fuel prices due to global geopolitical tensions, increasing trucking charges to cover rising costs, and a severe shortage of qualified drivers. To overcome these obstacles, these companies must employ effective bookkeeping strategies and adapt to changing market dynamics. Successfully addressing these financial challenges is crucial for sustaining their vital role in the nation’s economic infrastructure.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 platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO 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.