It’s not much of a surprise that as businesses reopen nationally, some trucking sectors are showing signs of improvement as well. Restaurants and hospitality industries were hit the hardest by COVID-19, but as they reopen, freight sectors are seeing more volume as well. Produce hauling has remained solid, and the panic shopping at grocery stores kept demand high. With volumes rising, however, rates are still an issue. Here is the current state of trucking.
Current State of Trucking:
- Diesel costs are low
- Rates are still low
- Volume is increasing
- Sanitation is a concern
- Employment is low
- Margins are narrow
What is the cost of fuel prices?
Diesel prices have stayed low, allowing carriers to keep hauling even when spot rates dropped. Diesel costs have a nationwide average of $2.396 per gallon as of June 8th. This is 70.9 cents less than June 2019. There is an expectation and hope of freight rates rising for the next few months, but volumes could take a hit if a second wave of COVID-19 sweeps across the nation from Memorial Day openings.
U.S. average on-highway #diesel fuel price on 6/08/2020 was $2.396/gal, UP 1.0¢/gallon from 6/01/2020, DOWN 70.9¢/gallon from year ago https://t.co/rXDU5IIzOq #truckers #shippers #fuelprices pic.twitter.com/7eP9wkeNOc
— EIA (@EIAgov) June 9, 2020
What are the top challenges of freight carriers following COVID-19 outbreaks?
The top challenge for truckers is rates. The second biggest challenge for truckers is finding enough business credit. These challenges are connected since trucking volume is up, but the pricing for hauling is still down from previous years. Margins are going to be trim amidst the uncertainty of the trucking industry. On top of this, employment rates for trucking are still falling. Nationally, unemployment rates are at historic lows, but more people are going back to work each month. This is because of the restaurant industry slowly adding back more employees. Unfortunately, this trend does not hold true for trucking. Even with PPP loans, larger carriers could run into trouble when the funds run out.
While employment rates as a whole begin to bounce back in the U.S., employment rates continue to plummet for the trucking industry.https://t.co/yGSuEqG15P pic.twitter.com/t7W481uDPR
— FreightWaves (@FreightWaves) June 10, 2020
Finding the Best Freight Bill Factoring
Slim margins mean there is not a lot of room for extra costs. Insurance, fuel, and repair costs will eat into costs. Factoring rates that are over 3% or factoring companies with hidden costs are only going to hurt the trucking clients they serve. Since margins are lean, it is crucial to find a factoring company that is straightforward and growth enabling.
Cashway Funding Features
The main highlights of factoring services from Cashway are customer service, factoring rate, no contract, and no hidden fees. Most factoring companies have fuel discounts, and Cashway is no different. Cashway offers a competitive fuel discount program that can even offset the 1.95% factoring cost.