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Ag Trucking Demand Poses Challenges and Revenue Opportunities

By September 9, 2021Factoring

The agricultural sector is experiencing growth and high demand. As we near the end of summer, harvested produce, livestock, and related products need to be shipped. But while demand is high, ag trucking – much like freight transportation in every other industry – is experiencing a driver shortage. Yet while there are challenges, there are also lucrative opportunities for owner-operators and trucking companies that want to position themselves within the ag sector.

The Impact of COVID on Ag Trucking

The driver shortage existed prior to the 2020 COVID-19 pandemic. By late spring of 2021, infection rates were down, vaccinations were up, and it looked like ag trucking was poised for a boom. However, the Delta variant threw a wrench in the works. By the end of the summer, trucking companies were facing lower recruitment rates, with a drop of about 30%. At the same time, many established drivers were retiring early to switching jobs, creating an even bigger strain in the agricultural sector. While this poses a big challenge to the trucking industry as a whole, for the ag sector in particular, it is a current pain point.

Increases on Vehicle Weight Limits Expired

Back in 2020, legislation was passed to increase the allowable maximum gross vehicle weight for ag truckers from 80,000 pounds to 88,000 pounds. This increase was for essential goods, such as paper products, food, and raw materials. Even with a driver shortage, the ag sector was able to make up the difference in volume, because the extra eight thousand pounds per truck allowed drivers to haul larger shipments and meet capacity demands. Unfortunately, that legislation only lasted until July of 2020, and there are many in the trucking industry who are lobbying to renew that policy to help ag trucking.

Opportunities in Ag Trucking

High demand gives ag trucking the upper hand when negotiating rates. Independent truckers may be able to offset a lot of the pressure by taking on spot jobs that regular fleets cannot handle at this time. Simultaneously, there is space in the ag sector for new trucking companies. Smaller trucking companies are an added benefit to the industry. They can coordinate with larger fleets to cover a wider radius and reach those cities and towns that fall outside of major shipping routes. With more trucking companies, produce, livestock, and more can reach destinations more efficiently, and fill in gaps in the driver shortage. New trucking companies are also having more luck recruiting drivers locally, and also from frequently overlooked demographics, such as women and younger drivers in the 18 to 21 age range.

Launching an Ag Trucking Company

Ag trucking companies are definitely needed, and the opportunity exists to take advantage of good rates to meet the current market demand, but launching a new trucking company can be a complex and time-sensitive venture. There are forms, permits, insurance, equipment, and more to consider. Fortunately, launching a new ag trucking company does not have to be complicated or time-consuming. At Single Point Capital, we provide comprehensive assistance and guidance to owner-operators who want to launch their own trucking companies. The team at Single Point Capital can provide equipment financing, deferred down payments on insurance, and our administrative fees are waived for clients who use our freight factoring services. Our startup program is designed specifically for people in the trucking industry who want to make that leap from being behind the wheel to running their own fleet.

Start Your Own Ag Trucking Business

If you are an owner-operator and you want to launch your own trucking company to serve the agricultural sector, contact the team at Single Point Capital. Our team will help you get all of your forms and permits filled out correctly and sent to the right agencies. We will also offer guidance, so you can draw from our years of experience and position your new business for growth and long-term success. From launching your own trucking company to equipment financing, great fuel discounts, and comprehensive factoring services to maximize your cash flow, Single Point Capital is a one-stop shop for owner-operators and fleet owners. To learn more about our startup program or any of our other services, reach out to the team at Single Point Capital today.

 


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