There is no doubt that the commercial transportation industry has evolved by leaps and bounds in the last few years. Access to technology and software, along with better services and infrastructure are some reasons for the growth and development of the industry.
As the world economy continues to grow based on rising consumption patterns, businesses in the transportation sector are also improving. One such business is the trucking industry, which seems to have benefitted massively from the inputs.
In this article, we are going to focus on the evolution of the trucking industry and what the future holds for the same in 2021. In addition, we are going to outline some critical factors, which are contributing to the profitability factor.
The Trucking Industry in 2021: Is it going to be a Profitable Business?
If you really want to assess the importance of trucking as an industry, take a casual look around the room where you are sitting. You will find that almost all products in the room have been on some of the other trucks at some point in time. The wooden tables, chairs, or the laptops and phones you are using to read the article have also been on trucks.
From a business perspective, it makes sense to invest in trucking companies as they are expected to grow. Most data and statistics on the industry also states that the CAGR of the industry is growing at 6%-7% year-on-year.
The advancement of roads, highways, and passes means that incidents like accidents are also on the decline. According to a top Florida truck accident lawyer, companies are investing to protect liabilities arising from accident-related issues. This means that proper care and attention is being paid to the safety, needs, and requirements of drivers who are hauling loads across thousands of miles.
List of 5 Reasons Contributing to the Growth of the Trucking Industry in 2021
- Technological Advancements-
The use of software related to logistics, inventory management, GPS systems, etc. means that efficiency has been increased. Technology is helping the industry reduce wastages, manage time properly, and ensure time-bound quick turnarounds. This means that productivity has increased on a massive scale, which is leading to more profitability for the industry as a whole.
- Development of Road Infrastructure-
Governments all over the world realize that the development of essential infrastructure is aiding the growth of economies. This is why road development ministries and authorities are investing in high-quality roadways, highways, and other passes. This has drastically reduced travel times, made the highways safer, and added to the growth of the trucking industry.
- Rise of Savvy Entrepreneurs-
The trucking industry has come a long way from being managed by traditional means. Exciting new start-ups and entrepreneurs are leading investments, new business strategies, and focus. This is a good thing for the traditional industry, which had been ailing for want of better vision and investments. Profitability and scaling of revenues are a key KPI for most new businesses.
- Improvement of Finance Facilities-
Investment companies, banks, and other financial lending institutions are also seeing a benefit in the industry. They are more open to lending at competitive rates to trucking companies. This is a major reason why new start-ups are able to fund profitable ventures as they are able to find investors and funds to scale up operations in the industry.
- Rise of Regulations-
While some may think that increasing regulations are choking the industry, others feel that it is a step in the right direction. The formalization of the previously unorganized trucking industry is making it a better business. Regulations are playing a major role in ensuring compliance, avoidance of conflicts, and better and responsible financial planning.
The Final Word
Everyone agrees that the trucking business is tough, especially for the people on the road. However, better management, technological adoptions, and financial investments are making the industry a much better place. Can you list some more factors, that are helping the industry become profitable and lucrative in 2021? Let us know in the comments section below.