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Trucking is a bit like the postal system: You have to deliver, come sunshine, wind, rain — or mudslides and blizzards. But what about drought? It may not affect driving conditions, but it certainly affects business.
As California enters its fifth official year of drought, state harvests have been down about 9 percent compared to pre-drought levels. That means demand for transport is down too, which has created a highly competitive environment in the trucking industry.
How can you gain an edge and maintain revenues? Consider these four strategies.
- Emphasize dedicated accounts. While the spot market can offer rich pay days during prime season, it can also leave you empty come winter, says Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association. Dedicated accounts, on the other hand, may not hit the high rates, but they will provide income stability all year long, he adds.
- Diversify your loads. The more you specialize in what you haul, the smaller your customer base becomes and the more vulnerable you are to the down cycles of a given market. But diversifying your loads can mean adjusting your fleet, too. “The equipment you have will limit to some extent what you can haul,” says Rajkovacz. “If you’re all refrigerated, you can’t even haul a load of tin cans. You may want to consider adding flat beds.”
- Look at niche markets. As part of diversifying, you may also want to consider working with multiple smaller niche markets. “It means getting out there and beating the bushes for business,” says Rajkovacz. “And you may be doing multiple pickups and drops.” In short, it could be more effort — but it means you won’t be competing for the Fortune 500 business usually monopolized by larger transport companies. And, by filling a need for the niche markets, you could find serious success.
- Focus on service. “Larger companies can focus on volume, but for smaller shops, service is important,” says Rajkovacz. And you can’t just talk the talk — you have to walk the walk: “Most companies know service matters, but they fail in implementing it,” he notes. In particular, put your money where your mouth is when it comes to timeliness and dependability — because if your loads are always late, your customers won’t delay in finding someone else.
Most experts agree that the drought won’t end without two or three consistent years of above-normal precipitation. That means trucking companies can likely expect softened demand to continue for the near future.
The good news: Rain or shine, the strategies above can help your business find firm footing.
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