Many fleets find their doors closed within their first year of service. Sometimes this is due to quick, unsustainable growth. Other times, requirements listed by the CSA are not met in time, creating a liability for the fleet. Insurance issues and cost management can also cause small trucking businesses to close up shop before truly getting established. So, how can your fleet avoid the same fate? Learn how to survive your first year as a small trucking business with Porter Billing Services.
Unsustainably Rapid Growth
Many fleet owners hit the ground running with high ambitions of quick growth and little organization. A small fleet should be exactly that — small. There is no need to jump the gun during the hiring process, which is already the greatest expense most fleets incur. Look for qualified owner operators to lease onto your company, this allows you to move more freight while still keeping your risk and costs low.
Consider outsourcing various tasks to allow your focus to remain on hauling freight. For example, you can turn over the invoicing process to a trustworthy freight factoring company. Without having to worry about late payments and chasing down customers, you can focus on your daily operations and leave the collections process to your freight factoring company.
Other tasks that can be outsourced include office functions, the payroll process, and marketing. By turning over certain processes to a third-party company, you relieve yourself of the responsibility and the stress, and it will most likely be cheaper. You will also know that all fleet processes are being executed in line with federal regulations.
Cause for Fleet Shut Down
Many times, fleets are shut down due to failing inspections or audits. For example, small fleets typically understand that they must experience the “New Entrant” period as defined by the Compliance, Safety, Accountability (CSA) initiative through the FMCSA. The “New Entrant” period is 18 months long. Within this time frame, any fleet filing for DOT registration will be audited. Many young fleets assume that they have 18 months to register. However, the audit can take place anytime within 18 months. So, if the audit takes place in month three, and your fleet is not registered, you will be shut down until all requirements are met! Being temporarily shut down can instantly lead to bankruptcy. So it is very important to abide by all rules and regulations in a timely manner.
There are many reasons your fleet could be shut down. If any vehicle that has been declared out-of-service is then operated before all repairs are made, your fleet will face the consequences. Likewise, any fleet operating a CMV that is not periodically inspected or using a driver without a valid CDL will be severely penalized.
Save Time & Money with Freight Factoring
Surviving your first year as a small trucking business requires attention to detail. It requires all hands on deck, and it requires time! Provide yourself with the best opportunity for success. Invest in freight factoring to relieve stress! With freight factoring, you will have access to working capital immediately, which you can use toward daily operations. The benefits are worth it! Learn more with Porter Billing Services. Contact us today!