What Expenses Are Toughest for Growing Carriers?
It has been well-documented that smaller carriers and larger carriers often have a big disparity between them in terms of revenue. And because larger carriers have a greater capacity to generate revenue, they are often able to deal with all expenses easily, while smaller carriers may struggle with even a moderate increase in a given expense.
But when it comes to mid-level carriers who are currently growing and looking to expand, it is worth understanding which expenses continue to be the most challenging. While a big part of trucking is logistics, which involves allocating resources effectively to deal with costs while generating the most output, medium-sized carriers have a few main expenses they must watch out for.
When it comes to things like fuel, carriers of all sizes feel the impact of this constant expense. Medium-sized carriers may lack the dedicated clients and fuel-efficient engines that larger carriers have. This can make it harder for them to budget in the fuel they need to get more business and grow.
Likewise, regulatory compliance can also pose challenges. Mid-level carriers may lack the necessary fleet to expand their operation when a new mandate impedes them in some way. Along with adapting to new mandates, upgrading to new equipment can sometimes pose a challenge as well.
Medium-sized carriers who are looking to grow can absolutely do so given the right economic conditions and the right logistical approach. Those that struggle will usually look to merge with a larger carrier, as this gives them the financial backing and necessary structure to support their growth. However, some carriers are turning to new methods for cutting costs and expanding on their own.