If you work in the transportation industry, whether you are hauling freight or dispatching, you have heard about the impending trucking downturn. When diesel goes up and spot rates go down, it usually sounds alarm bells for a downturn. So, is there a transportation downturn coming? Well, we aren’t sure. It is hard to predict.
Indicators of a Freight Recession
- Decline in spot market rates
- Increase in diesel cost
- Softening demand for trucking
- Oversupply of trucks
Spring 2022 saw a decrease in demand, high fuel prices, and lower spot rates. These market conditions are not a guarantee of a transportation downturn. Some industry figures are predicting a harsh drop off in trucking like we saw in 2019. So far, that has not happened. Others are predicting a soft landing. There are indications that the trucking market is slowing down, but no one can say for certain whether a freight recession is coming.
What Does a Freight Recession Mean for Your Transportation Company?
Whether we see a freight recession in 2022 or not, it is a good idea to have your ducks in a row. Make sure you are working with a trusted dispatcher and factoring company. Take a look at your factoring contract. If your rate increases, how will your revenue be affected? Are there unnecessary hidden fees driving that rate up? Don’t be afraid to shop around for a better factor that will work with you during a trucking downturn.
How Can You Prepare for Transportation Downturn?
Cut costs where you can. Use fuel discounts. Shop around for the best factoring company. Consider non-recourse factoring. It is extra protection for your cash. Most truckers use factoring, but not all truckers have non-recourse facilities. Non-recourse factoring is great during recessions. If you were hauling loads for Sears right before they shut down, a non-recourse facility ensures payment for those loads. When businesses close during economic downturns, non-recourse factoring facilities make sure you are still getting paid.
Cashway Funding Through a Transportation Downturn
It is important to work with a factor who is ready to fund your loads. At Cashway Funding, the trucking division of Eagle Business Credit, we offer free same day funding until 3:00 PM Eastern Standard Time. Submit your loads before 3:00, and we will fund you that same day.