The trucking industry is currently experiencing some rapid changes. Increased bankruptcies, technological shifts, and fierce competition are all having a strong impact on the industry. If you’re a truck driver, own a trucking company or are in any way involved in transportation or logistics, it’s important to stay informed on these issues. The following are three of the biggest trends that will impact truck driving in 2020.
Top 3 Trends That Will Impact Trucking Industry in 2020
1. Bankruptcy Protection
For any new company and especially in trucking, bankruptcy or insolvency is a real risk. Although many industry publications currently highlight the bankruptcy issue, a recent article by the Journal of Commerce (JOC) shows more new trucking companies are hitting US highways than going out of business. According to the Federal Motor Carrier Safety Administration (FMCSA), more than 21,000 new trucking companies were added to the market in the past 12 months. Of these 21,000 companies, approximately 78 percent were companies with one to six trucks. Roughly 168 carriers were added with 101 to 500 trucks. In the first half of 2019, we have seen just 640 carriers go out of business, which alludes to bankruptcies doing little to reduce trucking capacity. New trucking companies can protect themselves from this threat by utilizing non-recourse factoring with companies like Riviera Finance. If your shipper or broker goes bankrupt, non-recourse factoring protects you from loss.
2. Technological Advances
Technology is affecting many industries, including trucking and logistics. Here are a few areas that are likely to be significant in 2020:
- Tracking and transparency. Shippers want to know the exact location of freight at all times. Technological advances now make it possible to track the location of a truck driver or freight with precision.
- Artificial intelligence. AI is making many aspects of truck driving more efficient in areas such as predictive maintenance, monitoring drivers’ routes, and loading pallets.
- Blockchain. Blockchain solutions can help to make contracts and data more secure, reduce administrative costs and match shippers and carriers more efficiently.
- Autonomous trucks. Like driverless cars, the use of autonomous trucks is gradually increasing.
3. More Companies Using Transportation Factoring
Facing increased competition and pressures, many trucking companies are seeking ways to improve cash flow. Transportation factoring is a type of financing that makes it easier for businesses to enjoy a steady flow of cash which helps them meet expenses such as payroll and paying suppliers. With improved cash flow, you can also scale up your business and haul more loads. Factoring allows you to receive up to 95 percent of your freight bills within 24 hours of delivery and invoicing.
Riviera Finance has been offering premium transportation factoring for more than 50 years. Riviera has 25 invoice factoring offices throughout the U.S. and Canada. To learn more about how factoring can help make your business stronger, contact Riviera Finance.