Tips to Sustain your Trucking Company throughout COVID - 19

1. Know your bottom dollar and your sustainable profit margins

These unforeseen times have sparked one of the worst trucking markets in known history since the recession of 2008. It is a trying time for truckers who are essential workers however it definitely does not look like it with the rates. Now is a more important time than ever to keep strict recollection of all accounts. Deferrals of truck payments or insurance payments have been offered all across the U.S. It is pertinent that if you are still trying to stay afloat at this time and continue working, then defer anything that you can, as this can be pertinent to your sustainability in the months to come. Worrying about credit or whether this will be a bad reputation decision, should not concern you if you are simply trying to survive let alone turn a profit.

All Personal expenses should also be taken into account. If you are a smaller business with 1-5 trucks in your fleet i would implore you to constantly keep up with the heat maps of the trucking industry and keep pushing for work. Look at your bare minimum and if you feel like you can still make a profit or even sustain your drivers with minimal wear and tear to your truck, then it is definitely a better choice than staying home and watching the news for hours on end. Keep this in mind that every companies business plan will be different. If you have 50 Trucks and have slim margins to meet each week, then ensure you mark that target down and use your customer base along with the abysmal spot market to make it happen. From experience of this past month, I assure you it is possible to still turn a profit and meet margins for units. However, temper all expectations including, coming straight to your home terminal or consider doing a driver unload if it will continue to tack on more income which will amount to profit.
The Freight Market will bottom out and get back on the rise and I assure you this virus will end.

2. Be as Transparent as possible with your Drivers.

Drivers are the arms and legs of this industry, if you are unable to pay them or give them work, then be straightforward and to the point. The only way your drivers know you have the longevity of the company in mind is when they know if they are working or not and when. With the freight market currently at an all time low drivers, along with yourself, must shift the mentality to survival throughout these times of uncertainty. There is not much freight being moved HOWEVER, there still is freight to be moved. If your driver does not understand the current plans, you need do what it takes to keep them moving, whether it is a half week schedule or a temporary decrease in the cents per mile earned throughout this time. Is it better to let the truck sit then deal with more issues down the road when your driver is asking you why their deposit is not what it used to be?
Drivers are people too, their families were affected just like yours and they understand that throughout all of this we are still trying to keep America moving and more importantly keep their checks coming. I implore you to make a business plan that is able to ensure your trucks are moving and your drivers are up to date and safe. Keep them updated, install every safety protocol you can to make them feel safe and it will be one less issue to deal with throughout this time.

3. Search for any Government Aid.

Right now the Federal Government is approving SBA loans that are primarily for small businesses and that included the trucking industry. Talk with your best financial constituents, whether they are in your business or community to ensure you are making the right moves. But I guarantee you that an SBA loan with a long term repayment is in most cases a good idea for any business to weather this storm. Be wary of any emails saying they are a part of the government but are instead private institutions trying to give out loans with different, less than agreeable terms. Talk directly with your community bank or even get some advise from your tax advisor on where best to look for the funds the government is promising. The earlier the better in this situation.

4. Reach out to your customers.

In tough times where brokers will drive the price of freight straight underground, I advise to talk with whom you know to continue to your work with customers, however if they have halted all shipments then it will be time to enter the spot market as dismal as that seems. Continuously keeping your customers updated with your current state of business is always crucial to keep yourself in the forefront of thought for that extra load, especially, when each load is at your negotiated price and not at market rate.

5. If your customers have shipments halted then make a decision to park it or run market freight

If your company is in need of capital due to payments being deferred or you cannot afford to simply let your trucks sit in your terminal, then we must enter the spot market.

As abysmal as it is there are still ways to turn a profit inside of the market. If you are looking into Trucking Facebook groups and listening to all the users expressing their frustrations, it wont make you or anyone else any money.

The Market is in a bad state, however, if I were in your position of needing freight to move here is what I would do…

Firstly, I would talk to my drivers and be transparent in saying that we will have quite the unorthodox week and that we will ensure to keep them moving, however, for them to be prepared for layovers as well as longer wait times at facilities. This will allow your driver to expect the worst and for you not to get calls about work being less than pleasant compared to your usual freight

Secondly, study the market! It may be a less pleasant study, however, you will know where to send your trucks. For Example, as of 4/16/2020 Trucks located in TX will have better luck picking up freight from the southern border going out anywhere should be decent, however, returning to TX will be the issue so ensure you are getting enough out to cover your expenditures and expect your return lane to cover your profit. This will give you the best chance of success.

Repeat this process until you get a call from your usual customers or in turn find a lane you are satisfied with.

6. Reach Out to your Fellow Company Owners.

With the Market currently at a standstill, it is a time to show your community the true meaning of buckling down together. These are the times where every helping hand will go a mile down the road. If you are able to assist your drivers with that continuous payment at a higher cost to you, without it totally sinking your ship, then I implore you to do so. One of the most important things to a trucking company is driver loyalty and morale. Realize that those smaller sums of money that you can recoup are put to good use feeding families of those you are responsible for and in turn your drivers, if they exemplify character, will increase their loyalty and make your responsibility easier in return. A companies sense of character in tough times can further secure the future of your business for years to come whether it is with drivers or shippers.

7. Expect the Worst and Hope for the Best

If I have learned anything in the freight industry, it is that we do not know what the next week will look like especially in this uncertain historic period of time. Be sure to financially project the worst case scenarios and ensure you are conservative in your projections for revenue and costs. With an outlook that is realistic to the point of pessimism, you will be full prepared and often evenly surprised at how well you can do with the pressure of your company at your back. Continue to wake up and put in the work and I guarantee a more fortunate result than if you did not put all of these strategies into motion. Keep your business afloat because above all else the redemption from this virus will make companies extremely successful in the near future.

Take Care!

Andrew Gomez
Andrew@AJGTransport.com