Big Trucks Starting Small: Investigating the Factors that Contribute to the Success of

Trucking Business

Presented to
Practical Research 2 Class
Ms. Noeme Grace Tabor-Farjani
Research Teacher

Submitted by:
Arriola, Eugene Anthony J.
Camarinta, Roger Christ I.
De Los Cielos, Josh B.
Ozcelik, Jason Mark
Reyes, Joseph Marjiam B.
Table of Contents
Chapter 1: Introduction P.1
 Chapter 1
Introduction

Hauling businesses and e-commerce, especially those that deal with online deliveries, are
billion-peso industries with a lot of potential for growth. Some require transportation, which
trucking businesses can definitely fill in. Starting this type of business requires a bit of passion and
a lot of elbow grease on your part.

Trucking Companies in the Philippines especially in Mindanao are exponentially growing

because of its geographical location and the resources available on the island, especially in the
most rural part, Bukidnon. Companies like Del Monte, BUSCO, etc..., have been offering
opportunities for truckers to work with them for a very good deal and contract. This study is all
about the trucking companies and their strategies and techniques that contributed to their success
in a particular business venture. This study is necessary because
Thesis Statement
This paper intends to Investigate the Factors that Contribute to the Success of Trucking
Business. Furthermore, it aims to answer the following questions:

1. What is the profile of the trucking business owners?

2. What are the difficulties encountered in the trucking business?

3. How did the truck drivers handle the difficulties in the trucking business?

4. What are the some “trade secrets” you can share that can cope with the success of your
business?

Hypothesis

Scope and Limitations

This study is limited to all parts of Mindanao Truckers only. We would conduct an
interview with the owners of trucking and the drivers.

Significance of the study

This study intends to know the details of the following:

  Truckers - To know, educate, and understand the strategies and the roles of the trucking
company and how it transports the equipment from the consumers safely from point A to
point B.

 Businessmen - This provides information on how the trucking business became successful
and what to avoid in doing this business

 Mindanao business owners - Providing information to other truckers on which company

and routes can create better profit to your own trucking company

 Bukidnon -

Definition of Terms

 TRUCKING - is the activity of transporting goods from one place to another using a truck.
 BUSINESS - is defined as an organization or enterprising entity engaged in commercial,
industrial, or professional activities. Businesses can be for-profit entities or non-profit
organizations that operate to fulfill a charitable mission or further a social cause.
 GEOGRAPHICAL LOCATION - refers to a position on the Earth.
 E-COMMERCE - commercial transactions conducted electronically on the Internet.
 TRUCKING COMPANY - a company that ships goods or possessions by truck.
 Chapter 2
Review of Related Literature

A cheat sheet for starting your trucking business

According to Rodela (2018), Getting started as a small trucking carrier involves a lot of
planning and preparation. The usual approach is to start as an owner-operator, which means, you
should have your own truck as well as participate in the daily activities of your fleet. Creating a
business plan is always a good idea and 2 specific formats are available for creating a business
plan for the trucking company. These are Traditional business plan formats where it is
comprehensive while Lean startup format can anticipate future changes and it requires fewer
details than a traditional business plan and is more flexible. Legal requirements are a must for
having a successful trucking business. In addition to a valid CDL, owner-operators must fulfill a
number of different requirements prescribed by the FMCSA. This includes a one-time United
States Department of Transportation Number, a Motor Carrier Number, International Fuel Tax
Agreement stickers, and an International Registration Plan. Funding your business in most cases,
to start a trucking business, an investment of somewhere between $10,000 and $30,000 should be
enough to cover the costs of insurance, vehicle down payments, permits, and a variety of state-
specific expenses. If you have enough funds and decide to purchase your own assets, it’s always
better to go for quality over price especially when it comes to vehicles. Paying a higher price for a
brand new truck may mean fewer repairs, maintenance, and downtimes that may hurt your fleet’s
profitability. The same can be said for second-hand units that are well-maintained and are from
reputable manufacturers. Every carrier needs insurance to protect the business from unexpected
financial burdens. This should cover risks such as damages to your vehicles and injuries caused by
road accidents. You may consult trucking forums and social media communities for
recommendations on which insurance product to purchase based on your needs. Preparing for
trucks for the road is always a priority to prepare for the last requirement. On top of your USDOT
number and the company’s registered name decals on your vehicle, you also need your Radio
Frequency Identification tags displayed on your windshield. Also, you shouldn’t forget your
license plates or International Registration Plates if you operate across multiple states. Recruiting
and retaining good drivers is a challenge. A solid driver retention strategy begins with an effective
driver recruitment process. Use a Pre-Employment Screening Program to view a prospective
driver’s crash data for the last five years and roadside inspections for the last three years. For driver
retention, it also focuses on driver happiness and fulfillment instead of just focusing on cash-based
incentives. When offering performance-based rewards, leverage ELDs and driver safety scores
information to rank drivers according to performance, safety, and efficiency. Lastly, Growing your
client base like staying loyal to one customer might seem reasonable, but it may not be sustainable
in the long-term. What you need to do is to diversify to stay profitable regardless of the individual
financial standings of your clients.

Key Factors Affecting the Trucking Market in 2019

According to Mark (2019), the Driver supply shortage is the industry continued to operate
in the deficit of drivers in 2018, this year it is still the same news. Despite the efforts and better
incentives to draw new drivers the strong shortage continues to increase from 60,000 in 2018 to
70,000 in 2019. Businesses that are dependent on truck shipping, should be more than aware that
driver shortages continue to contribute to a sporadic shortfall of available trucking capacity. The
driver shortage, including the problematic driver retention, is expected to remain a primary concern
for the trucking industry not only this year but for more years ahead. Growing Trucking Rates &
Driver Wages were rapidly rising up to 30% in spot markets last year in 2018, however from the
first quarter of 2019, spot rates had fallen and capacity has improved. In 2018 driver wages grew
strongly compared to previous years, all on different levels based on the region, and truck market,
but the general trucker pay was up around 10% on average over the year. Raising wages and
making higher pay and better benefits for truckers serves the main goal – to reduce the truck
capacity shortage and draw new drivers to become truckers. Unfortunately, an increase in driver
pay translates immediately to similarly higher rates for shippers. Both driver wages and trucking
rates are expected to go up about 3 to 5% on average in 2019. Geopolitical Turbulent U.S. domestic
politics has a tremendous impact on the trucking market while being also influenced by the
ongoing global trade wars that are pushing shippers to make difficult decisions regarding their
operations and supply chain. In 2019, factors like the US-China Trade War, Global-National
Regional Economies, e-commerce, and the political climate could each affect import volume and
its associated shipping requirements. Not to mention that many manufacturers have built their
supply chain over a span of decades and will find it challenging to establish new supply chains and
avoid costly tariffs. Trucking Demand Growth Slowing Down economic and political volatility
are both contributors to a reduction in shipping volume in 2019 as expected. According to
economists, a slowdown in the last quarter of 2018 indicates that the demand growth rate is
expected to decrease in 2019. But even with a slowdown in growth, 2019 shippers will face
significant worries. 2019 will remain a tough year to be a trucking buyer and 2019 will continue
to be a more expensive and much more challenging period to bring goods to market. Shippers will
have to continue the search for ways to significantly improve areas such as truck utilization,
network operating costs, find new and different types of capacity, and reduce loading and
unloading cycle times and beyond.

9 Tips for a Successful Trucking Company

Running a trucking company can be both rewarding and stressful. Making it as successful
as possible is the goal of every trucking company owner. Trucking companies want to make sure
they’re a part of the success. Here are a few tips to help you run a successful trucking company.
Having trustworthy and dependable employees is an invaluable asset to a company. Good drivers
and good back-office support help you run your trucking company more efficiently. The trust you
have in your employees to make the right decision can relieve some stress and pressure from your
job as the owner. When you search for customers, you’ll want to make sure they’re credit-worthy
customers. Make sure the customers agree to pay you a good rate to account for your time and
expenses. But most importantly, make sure the customers you agree to work for will pay you.
Companies that use invoice factoring with TCI Business Capital have a free added-service of credit
analysis and risk assessment. We check the credit-worthiness of your customers to help ensure you
will get paid for the work you do. Getting a job to haul one load is nice, but if you can secure a
contract for a length of time with multiple loads, it’s guaranteed money for your trucking company.
But of course, before you secure a contract, make sure you’re working for good customers who
agree to pay you enough to cover your expenses in order to turn a profit. When you bid on jobs,
make sure you factor in all of your expenses, including your time. If the customer is requesting
anything special or out of the ordinary that will take extra time, make sure you factor that into your
cost. Another thing to consider when the bidding is where the load needs to be dropped off or
picked up. Try to plan your loads so that your truck is empty as little as possible. As we all know,
an empty truck doesn’t make any money, but fuel and labor costs still occur. Keep your trucks
running on the road as long as possible by scheduling preventative maintenance checks. Scheduled
checks keep trucks on the road as long and as often as possible. It also prevents unplanned truck
troubles. The budget for your expenses and plan for them by having some cash in reserve. Make
sure to leave extra room for unplanned expenses such as truck repairs, new tires or even new
equipment. Keeping a steady and positive cash flow can be difficult for trucking companies
because of slow-paying customers. Customers may take 30 to 60 days to pay, but you need to fuel
your trucks daily and pay for your drivers weekly or bi-weekly. If keeping a positive cash flow is
a challenge for your trucking company, freight factoring can help relieve some of the cash-flow
stress. Instead of waiting to get paid on your invoices, freight factoring provides you with same-
day cash. Fuel cards provide your trucking company with discounts on one of your biggest
expenses fuel. TCI Business Capital offers fuel cards to trucking companies that factor their
receivables at no extra cost. The funds from their invoices are deposited directly into the fuel card
account. The fuel cards are accepted at more than 10,000 truck stops in the United States and
Canada. Just like in any market, the demand for trucking services will rise and fall. Don’t get
discouraged during the tough times. Keep truckin’ along by working hard and bidding on jobs to
grow your business and increase your profits. Hard work and dedication set trucking companies
up for succes