Business Valuation Blog | Understanding Buying / Selling a Company

Valuing a trucking company to keep up with new trends

Posted by Business Valuation Specialists LLC on May 17, 2017 2:42:00 PM


Today's supply chain logistics are rapidly evolving through the addition of new technology, business models and similar advances. Where does your business fall within this rapid change of industry? Valuing a trucking company can provide you with valuable insights to help keep up with the latest trends in the sector. Here's a quick look at upcoming trends from RCX Solutions and how business valuation helps you adapt to these changes.

Valuing a trucking company to keep up with new trends

  • We don't know where trucking policy is headed. We have a new president in office, who at least on the campaign trail, promised to grow American businesses. In theory, this could have a very positive impact on domestic shipping as international shipping tapers off. However, whether those promises turn into reality remains to be seen. This could raise or lower your company's overall value based on demand for shipping services.
  • E-logging regulations require new schedules and procedures. Every trucking company in America must be in compliance with these regulations by the end of 2017. Because of the increased accuracy of logs and the scrutiny given to the information collected in these logs, deliveries may take longer as drivers must take breaks and spent shorter stretches behind the wheel to remain in compliance with FTC regulations. This will increase the cost of deliveries and can either raise your profitability from higher delivery fees or cut into your overhead as your rates stay the same to remain more competitive.
  • Freight costs are going to keep going up. Our economy is solidly in a recovery stage, which means more consumers are buying products. That means those products need to be brought to the market, requiring more deliveries and higher demand for trucking companies. This trend will definitely increase your trucking company's value as many trucking companies didn't survive the recession or are still recovering from the economies that were put into place to get through the hard times.
  • Reefer transportation remains very competitive. Because it's a specialized sector, refrigerated transportation rates will continue to see high demand and higher rates than in the past, even with increasing transportation options and continued lower fuel costs. Increased interest in fresh foods and frozen goods in the summer are expected to put additional pressure on this sector of the industry, especially when combined with the new restrictions of the e-logging regulations making driver time that much higher of a premium. Having this capability will increase your business' overall value.
  • Partnerships and collaboration are the way of the future. One of the biggest trend in digitization is the move to partnerships and collaborations, especially between trucking companies and shippers. You'll be able to work together so your shipper is putting parcels, pallets and packages together in the most efficient configurations for your trailers, allowing you to maximize every fuel mile your tractors run. New technology will make it easier to coordinate pickup and load times based on e-logs, GPS positioning and analytical data to minimize down time. These will probably help boost your business' overall profitability and appraised value.

Smart entrepreneurs use business appraisals to determine the direction their company needs to go to get maximum growth and minimal risk. Business valuation helps you discover a wide range of aspects of your business and industry that you may have otherwise remained unaware of. By valuing a trucking company, you can quickly determine what your business is worth and where you can make improvements to boost that value.

Topics: valuing a trucking company, trucking company valuation