The global lockdown can have many implications for the commercial vehicle and tractor-trailer industry. The last years were challenging for the trucking market, with many start-ups failing to reach their purposes. So, experts have mixed feelings about 2020. But trucking experts are optimistic because even if the pandemic has isolated people inside their homes, industries worldwide still rely on trucking companies to provide services and deliver goods. There is a scenario where 2020 could be even more robust than 2018, which was the year with the highest results for the market.
The truck industry has a significant influence on the global economy, but it has to consider some trends that influence its evolution. Climate protection, social change, competition for resources, and demographic shifts are only some of the factors that influence the truck industry this year.
The concern about climate change mixed with environmental regulations, governments, adopted worldwide, triggered a new level of responsibility for entrepreneurs who need to lower emissions and boost fuel efficiency. They need to invest in eco-friendly models that run on a low amount of fuel and don’t pollute the environment. Automotive manufacturers are developing new engines to meet the latest regulations on nitrogen oxides and particles. But the world still finds it challenging to transform the truck industry into a green market because there are many differences in rules. Some states still have more lax regulations that deter the eco-friendly movement.
Persistent pollution made it imperative for truck companies to use vehicles that allow the use of alternative fuels, especially when they provide their services mainly in cities. Some significant towns also launched bans on trucks because they cause the greatest pollution. The solution for truck companies is to use lighter vehicles to continue to deliver their public the needed services.
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Why should entrepreneurs invest in the truck industry in 2020?
Even if it has its ups and downs, the trucking business remains one of the most profitable ones. But because it delivers high earnings, it’s also exceedingly competitive. Entrepreneurs are aware of the potential for profit this venture holds, so they try to get their foot into the business, but many of them fail because they aren’t ready to face the challenges of the industry. Most of them aren’t capable business people; they are skilled truck drivers who think running a business is similar to driving on the roadway. Only investors who can handle cyclicity should invest in the trucking sector because the market is highly volatile.
At the end of the day, it all comes to how they run their business because it’s similar to starting any other company. Owning a company means handling operational costs, making a profit, and keeping employees safe. Also, keeping an eye on commercial truck insurance average cost can make a trucking business profitable. For someone who lacks experience, launching, and managing a venture is challenging.
So, the question is, Should you start your own business?
Experts recommend only those with extensive experience in the industry to do it. And even they should answer many questions before investing in the trucking business.
- Do I have potential clients willing to hire me?
- Do I have money to purchase or rent equipment?
- Do I have potential employees I can trust to work with?
- Do I have a business plan?
- What is the cost of starting a business?
- What income do I need for the company to be profitable?
- How much does it cost me to run the trucking company?
When you have clear answers to all the above questions, you can think about starting the business.
Investors need to know the biggest expenses of the business before launching themselves in the industry
The highest operational costs of running a trucking business are the drivers’ wages. Even if some would think the fuel is the most considerable expense a trucking company must handle, nowadays, fuel comes at affordable rates. With fuel-efficient vehicles available on the market, managers can easily cut costs. But experienced and skilled drivers are expensive to hire, and their wages have continued to grow over the last years.
With trucks like the ones from Volvo, companies can control fuel expenses because the manufacturer is known for making high-quality vehicles. Even if the initial investment is more substantial when a trucking investor purchases Volvo Trucks Canada, it’s worth it because they can save money in the long run, to pay employee salary. When they open the business, they can apply for a loan to finance their equipment because lenders offer many opportunities for young entrepreneurs who lack resources. They don’t have to deal with traditional institutions that delay the approval of the loan because they need guarantees the business will be successful, they can apply for a loan online, with the lender they prefer.
Saving for fuel and paying higher wages to drivers isn’t as bad as it sounds. It actually helps a business grow because satisfied workers provide excellent services to clients and retain customers. Competition can always make a better offer to employees. Still, if they’re happy with the benefits they get and their employer providers them an excellent work environment, they have no reason to leave.
Entrepreneurs can save fuel money if they apply for cards
Trucking businesses can invest in tools that help them cut fuel costs. Alongside using fuel-efficient vehicles, they can also take advantage of the advancements; technology brings on the market to lower expenses. Fuel costs account for 30% of a business’ budget. Many investors use fuel cards to get discounts when they buy fuel for their vehicles. Most of the fuel providers have cards their loyal clients can use to get lower prices for energy. Trucking companies can also install fuel finders on their drivers’ smartphones to find them the best rates for fuel when they drive across the country. Some of these apps and cards even help with discounts for truck maintenance necessities, parts, and tires.
As investors continue to discover new ways on how to make money from trucking ventures, predictions show that the industry will register a new wave of growth in 2020. They have an idea of how to make a profit from their investment, and with the right guidance and team, they can achieve their goals.