Back at the start of the COVID-19 pandemic, almost every industry experienced downward pressure. This drove down rates for carriers and gave shippers more leverage in price negotiations. Now, after many long months, imports are on the rise and domestic manufacturing is experiencing increased demand and production. Together, these two sectors could cause a year-end turnaround for trucking companies.
A More “Normal” Fourth-Quarter
Looking back, the past few years have been unpredictable for the trucking industry. Artificial tariff scares led to high demand, followed by a recession in the freight industry, which was soon followed by the pandemic and everything we’ve experienced up to this point. However, it looks like container capacity is increasing in California as countries across the Pacific Ocean start to increase production and shipping. Already, trucking companies that serve the ports in California are witnessing a per-mile rate jump from an average of $1.35 to almost $4.00 and rising. Similarly, manufacturers within the United States are emerging after months of stagnation, meeting the demand of clients and helping to jumpstart our economy. Add to all of this the increase in e-commerce and an uptick ahead of the holiday season, and things are finally looking more “normal” after more than half a year of uncertain and pessimistic forecasts.
Trucking Companies are Prepared and Cautious
Just because the outlook looks normal now does not guarantee it will remain that way. Trucking companies learned a hard lesson in 2019 when the projected growth caused by impending tariffs came to a screeching halt. Now, fleets and owner-operators alike are approaching the recent uptick with caution, and they are preparing their operations accordingly. The focus has shifted slightly from “what could be” to “that’s happening now.” To build up a financial cushion and get a head start on current economic trends, trucking companies are not letting their receivables sit for long periods. Instead, they are using factoring services to turn those unpaid freight invoices into cash quickly so they can stockpile capital no matter what happens over the next few months.
At Single Point Capital, we specialize in factoring services for trucking companies. Contact our offices today and get a competitive edge during this fourth-quarter upswing.