Three Ways Small Fleets Can Stay Competitive
Originally appeared in Fleet Owner
While consolidation is a fact of life in today’s trucking industry, small fleets and owner-operators have their own place in the supply chain now and in the future. Part of that future is in carving out one’s own niche.
It seems like every time I look at a trucking industry publication, newsletter, or website, there is news of a merger or acquisition. Consolidation is a reality in the trucking industry as fleets look for ways to gain economies of scale when purchasing everything from new vehicles, replacement parts, oil, and fluids to shop equipment and diagnostic tools.
While this consolidation is good for the fleets merging, it is likely to have negative repercussions for smaller fleets. According to the Federal Motor Carrier Safety Administration (FMCSA), about 97% of fleets run fewer than 20 trucks. And 92% operate with six or fewer trucks and, in many cases, are family-owned owner-operator businesses. It is going to be difficult for these small fleets and owner-operators to compete with the buying power of larger consolidated fleets. However, there are important things they can do to remain competitive.
Three things small fleets can do to stay competitive
- Band together with other small fleets. Small fleets and owner-operators should consider pooling their spending so they can take advantage of volume discounts for purchasing in larger quantities.
- Focus on the last mile. The last mile has become increasingly important and could be a good niche for small fleets and owner-operators. These shorter hauls should make it easier to find drivers because they will be home every night, which drivers say they want.
- Change equipment specs. Sleeper tractors are the most expensive vehicles to purchase, even on the used-truck market. Day cabs and straight trucks are well-suited for last-mile operations and have lower initial purchase prices. In addition, fleets operating in the last-mile space likely will put fewer miles on their trucks, meaning they can keep trucks in service for more years, allowing them to spread their finance costs over a longer time.
While consolidation is a fact of life in today’s trucking industry, small fleets and owner-operators have their own place in the supply chain now and in the future. They may not be able to compete head-to-head with the consolidated mega fleets, but they can stay on the road and be profitable
At Corcentric, we stand ready to help any fleet bridge that gap. To learn how we can help, contact Corcentric today.