The winter slump occurs each year as holiday shipments end and a lull hits before the spring planting season begins. With this seasonal slowdown, spot rates often fall, too. Getting through winter freight slowdowns is difficult, but there are ways to optimize your trucking operations to maximize profits.
Common Winter Freight Challenges and Dilemmas
It’s already tough out there. The Cass Freight Index shows a decline in shipments since a high point in 2022. Freight rates were also lower and remained between $2.75 and $3 in 2024. Winter adds to your problems. To be competitive, you need to have a lower rate, and that eats into your possible revenues.
Road Conditions and Weather
Several factors can impact your trucking business in the winter. Weather is part of it. Inclement weather can slow your drivers down and lead to unhappy brokers and shippers, even if the icy or snow-covered roads are not your fault.
A sudden blizzard may cause highway or interstate shutdowns that delay your drivers. A state’s department of transportation needs room to clear the roads, and they may close the roads to make sure there’s room for those trucks to do their job.
Dense fog is unsafe for traveling. Traffic may be forced to pull over and wait until the fog lifts. In warmer weather, heavy rains can lead to flooding that shuts roads temporarily.
A third issue with winter weather is the brutal cold temperatures and wind chills that are tough on engines. If the oil thickens, an engine may not start. Batteries drain in the bitter cold, and below-zero temperatures can also make windshield washing fluid freeze up, so cleaning a windshield becomes impossible. It’s unsafe to drive when you can’t see.
Winter weather across the U.S. often impacts road conditions, which makes it harder to get to your destination. Even if your drivers are experts at driving on snow and ice, other drivers may not be as good. A crash ahead of your drivers can make it hard for your driver to stop in time, and other drivers may slide into your rig and cause damage.
As the weather and road conditions make it harder for your drivers to get to their destination, loads are late. This puts you behind schedule, so you need to catch up. Unfortunately, your clients aren’t happy with the delays. The risk of losing their business is concerning and would impact your already tight finances. That’s why it’s important to have a plan in place.
Supply Chain Issues
Supply chain issues are also a concern in the winter. You might get to a destination on time, but that doesn’t mean a ship arrived at the port on time. If the weather is complicating a factory’s ability to produce the goods you’re supposed to pick up, you have no choice but to wait until that factory is ready. This costs valuable time.
Another problem with winter supply chain issues is the availability of fuel. If the supply chain is keeping gas or diesel shipments from arriving on time, the shortage drives up prices. You pay more for fuel, which eats into your profit margin.
Strategies That Help You Optimize Your Business Strategies
How can you protect your business from winter’s monkey wrenches? Start by having a contingency plan. If roads are closed, is there an alternate route planned out? If there is another client’s shipment in the trailer, could your driver do that one first and the other second?
Use load tracking software to know the exact location at all hours. Keep your clients updated if your driver is facing delays due to road closures, accidents, or supply chain issues. Often, you can avoid a lot of dissatisfaction by staying in constant communication with your clients.
Keep on top of weather reports and plan for inclement weather. If there’s a sudden squall, it’s often better to have your driver pull over and wait it out or take another route that circumvents the localized storm. If there is bad weather in the forecast, ask your client if it’s possible to do the job on another day, such as a day early, providing you can adjust your schedule.
Every truck needs to be properly maintained to ensure there are no issues like worn tire tread or a dying alternator. Make sure an emergency supply kit is available in the cab. This kit should include flares, non-perishable foods, water, blankets, a change of clothes, and a shovel. A bag of sand helps create traction if the cab and trailer slide off the shoulder.
Your drivers need to be equipped with winter apparel like waterproof, insulated boots with deep tread, gloves, a hat, and a thick, waterproof jacket. If the driver is in mountainous areas, chains are important.
When you deliver a load for a client, stop waiting weeks or months to get paid. If you’re used to the traditional accounting method where you go back to the office, generate an invoice, and mail or fax it to your client, it’s time to modernize your operations.
Freight factoring is a financial service where you partner with a factor who pays you immediately and takes over billing your client. You pay a small fee for this service, but you get paid that same day provided you meet the freight factoring company’s deadline. Payment is always received within a day or two if you miss it. That’s better than waiting until the end of the month.
Additional benefits are available to trucking companies that use freight factoring. Fuel discounts help you save money on every fill-up. Access to load-finding apps helps you find more work when you need it. Free business credit reports make it easy to research a potential new client’s financial standing before agreeing to work for them.
Choosing the Best Freight Factoring Partner for Your Individual Needs
The best freight factoring partner takes a little research, and you need to be upfront and ask questions. You want to compare freight factoring rates, access to technology, and availability of extra services like free business credit checks and load-finding boards.
Verify the customer service team’s hours. If it’s going to be difficult to reach out for help, you want to choose a different factoring company. You’re busy on the road and don’t have time to waste on hold. Email or text support is better for busy truckers.
Saint John Capital is here to provide the tools, low factoring rates, and additional services you need to optimize your trucking company’s operations this winter. Our Click & Pay API simplifies your bookkeeping and invoicing processes with easy submission of your bills of lading and a generated invoice that you can upload to your bookkeeping software.
Sign up free and get started setting up an advantageous factoring agreement that matches your needs and helps you maximize profits.
