Why Do Over 80% Of Trucking Businesses Fail?

Owning a successful trucking business is a commonly shared goal, but the current challenges within the market are making it increasingly difficult for businesses to stay afloat. Unfortunately, about 80% of trucking businesses end up failing, especially within their first year of business.

In this blog, we will explain the top 5 reasons rucking businesses fail and provide guidance on how to overcome these challenges.

1. Poor Business Setup
   The trucking industry comes with a unique set of regulations and requirements needed to legally operate. Navigating these rules is challenging and demands careful attention and time to properly set up your business. Failure to adhere to DOT compliance or neglecting initial business setup requirements will result in costly fines, operational suspensions, and ultimately, loss of authority.
   
   
2. Poor Cash Management
   Cash flow is the lifeblood of any business, especially in the trucking industry. With delays in customer payments becoming more common, trucking businesses are facing challenges when it comes to managing finances between various jobs. If finances aren’t handled properly, businesses will face cash flow shortages that will ultimately prevent them from covering operational costs.
   
   
3. DOT Noncompliance
   It’s no secret that the DOT is cracking down on their regulations. Whether an infraction is due to safety violations, compliance issues, or inadequate record-keeping, DOT fines come at a hefty price and can quickly become a financial strain on the business. Strict adherence to compliance regulations and requirements is essential to avoiding business failure from costly DOT fines.
   
   
4. IFTA Noncompliance
   IFTA and MTR reporting and filing is not a simple task. Inaccurate IFTA/MTR reports or late filings will lead to expensive fines and IFTA audits. Similar to DOT fines, IFTA/MTR penalties are costly and can cause significant financial challenges on the business.
   
   
5. Loss of Authority
   Having multiple DOT violations, compliance issues, or unresolved fines will lead to a loss of authority. Unfortunately, restoring your authority is a significant challenge and can take months or even years to reinstate, depending on the severity of the offense.

How To Overcome These Challenges

We understand how overwhelming and complex it can be to effectively navigate the trucking industry while running a successful business. However, with the right support and guidance from industry professionals, you’ll be able to conquer any challenges that may arise, especially those that will lead to business failure.