The pandemic has impacted all parts of the economy, and the trucking industry is no exception. Truck drivers have now seen an increase in wages. The upward pressure on wages that carriers face is a major concern for those who need more working capital to pay their drivers.
Increase in Pay Indicates Greater Trend
Many companies have already announced decisions to increase driver pay this year, suggesting a greater trend. A recent surge in cases and the ongoing pandemic has placed a strain on the supply chain for drivers. As a result, truckload carriers have increased driver pay on top of other incentives such as upgrading benefit packages and offering generous signing bonuses. Other carriers are also increasing pay to recognize the work their drivers have done during the pandemic.
Although the outlook for the overall transportation environment will remain positive, other factors will push the supply chain down for truck drivers this year. Constraints on transportation due to the pandemic and restrictions on state licensing will also continue to limit the number of commercial drivers available. Even with the initiation of vaccine distributions, it will take time to see a notable increase in the supply chain for truck drivers.
Driver retention has been a rising issue in the trucking industry over the past few years. Many new drivers do not have any incentive to stick with the job for any length of time. Higher wages and even sign-on bonuses have helped to mitigate churn rates, while simultaneously attracting new drivers. The positive results from trucking companies that have employed these methods could serve as a good model for closing the growing driver gap, which could reach a critical state later in 2021. Even smaller trucking companies are finding creative ways to reward loyalty in drivers who stay with their jobs instead of treating them as temporary positions.
Boost Working Capital to Pay Employees
A tight market for drivers will endure for a while forcing most trucking companies to ultimately increase wages for their employees. Now carriers of all sizes will need to accelerate their cash flow in order to keep up with new driver wages, which might put a strain on their working capital. However, the solution to this is freight factoring. Freight factoring provides trucking companies with cash flow immediately, instead of having to wait several days to get paid. This allows carriers to pay their expenses and grow their business. Trucking companies who utilize freight factoring will be able to keep up with trends and competition by paying their drivers quickly and maintaining competitive pay.
Single Point Capital offers factoring solutions to carriers throughout the United States. We are committed to providing fast and efficient invoice factoring so that carriers can gain a foothold in the trucking industry at the start of the year. Why fall behind the competition by waiting 30, 60, or even 90 days to get paid from previous jobs? Single Point Capital will make cash avialable within a single day from the time you submit your unpaid invoices for factoring. To learn more about our comprehensive services, contact us today.