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capacity diversification
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Carrier Diversification and the Capacity Crunch

December 28, 2017

Diversification, often used by trucking companies to hang in and survive during an economic downturn, may work just as well in today’s capacity crunch.

For the past few years, people in the trucking industry worried about a driver shortage and about the impact of the ELD mandate on productivity. Now, with freight volume rising, both of those issues contribute to what appears to be shaping up as a serious capacity crunch.

On first glance it would seem a natural assumption that the larger carriers will swoop in to fill shippers’ needs. They are in a better position to add equipment and lure drivers with higher wages or benefits that smaller carriers can’t match. But larger carriers are also often less flexible about where they will route their trucks. They aim for efficiency from one drop-off to the next pick-up point, and so tend to stick to the same lanes. That can leave a lot of markets open for the small-to-medium carrier, especially as e-commerce continues to gnaw away the retail industry.

Diversification, often used by trucking companies to hang in and survive during an economic downturn, may work just as well in today’s capacity crunch. Shippers are looking for help, and a carrier that can meet their needs now is likely to be remembered further on down the line.

A first step is to check in with current customers to see where your company can help. Maybe they have a stronger need for expedited freight. What would it take for your company to step in to get those loads? Would you need more equipment? More drivers or other staff? Does it require an investment in new technology?

Where do you see opportunities that you are passing up now because your company doesn’t have the equipment? Does it make sense to add reefers? Flatbed? If you’ve focused on truckload, is a move to LTL feasible?

The goal is to take on new challenges that you know you can handle, think through what you need to accomplish the job and invest where necessary.

These are moments that an ambitious trucking company can use to grow. Tightened capacity should increase rates (which already is happening in LTL) and make growth of the fleet financially feasible.

Are you a Fleet Owner looking to diversify and grow your trucking business, but limited with current financing options?

We can help you get paid faster for loads delivered and protect your fleet from lost revenue.

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