Acquisitions are on the rise in the trucking industry. Larger carriers are looking to acquire smaller fleets to cover more ground and diversify their services by offering last-mile delivery. Other acquisitions are happening simply because multiple carriers are competing for the same clients and cannot afford to reduce their margins. Whatever the reason, trucking acquisitions can be very delicate and complex affairs. During any acquisition, there is a transition period that places cash flow and driver retention in precarious positions. Fortunately, there are solutions to manage both.
Driver Retention During Trucking Acquisitions
As a whole, the need for driver retention is rising throughout the trucking industry. During acquisitions, driver retention can be challenging. People in general are averse to change, and the prospect of new leadership and management styles makes employees apprehensive. It’s the uncertainty of the future that causes drivers to leave fleets after trucking acquisitions. Loyalty also plays a big part in driver retention. Think of it as if your favorite sports team moved to a new city, or came under new ownership. The solution is to form a communication strategy, ideally ahead of the acquisition itself, to get drivers used to new faces and leaders. Ensuring that communication is a two-way street so people can both voice and address concerns is a big part of driver retention during trucking acquisitions. Some fleets put forth an incentive to drivers to keep their loyalty, or find some way to make them feel like part of the team, even though the name of the business has changed. If employees are invested in the success of the company after the acquisition, or feel a sense of ownership, or that their voices are heard, then they are more likely to stick around. The biggest trap trucking company owners fall into during an acquisition is not communicating until it is too late, and sifting through the fallout on top of juggling the finances and logistics during the transition period.
Cash Flow and Trucking Acquisitions
Cash flow plays a huge part in trucking acquisitions. Working capital is crucial to maintain and grow operations, especially during the transition period. Capital, human resources, and assets need to be in order so regular operations can be maintained while the acquisition is taking place, in order to prevent any downturns in business. Most trucking companies will perform a full assessment of both companies to form a strategy to ensure a successful acquisition with the fewest disruptions. During a trucking acquisition, an in-depth analysis might reveal potential pain points in cash flow, typically resulting from unpaid receivables. The easiest way to take care of these issues and get supplemental working capital in the process is to use freight bill factoring. At Single Point Capital, we specialize in factoring services to boost cash flow to trucking companies. We will convert unpaid receivables to cash and make funds available within a single day, so you can accelerate cash flow, eliminate unpaid invoices, and get immediate access to working capital without relying on debt-based loans. To learn more, contact Single Point Capital today.