Over 3.5 million people worked in the U.S. trucking industry in 2024. Of those drivers, 57.6% drive tractor-trailers as part of their jobs. Others run direct-to-customer, last-mile, or local routes. More concerning is that 20.7% of these drivers are Baby Boomers, and 40.8% are Gen X. Millennials (30.7%) and Gen Z (7.5%) are less common.
The concern is that the number of qualified CDL drivers isn’t keeping up with demand. As Baby Boomers and Gen Z drivers retire, it becomes harder to find workers to replace them. It’s more important than ever to keep your drivers happy. When your cash flow is unstable, driver turnover rates tend to increase.
The Value of a Strong Cash Flow
Imagine trying to keep up with your personal bills, household needs, and unexpected purchases if you didn’t know when you’d get paid. When your cash flow is unstable, it becomes difficult.
Running a business becomes just as tough when payments come irregularly. Your driver finished a long-haul load weeks ago, but you still haven’t received your payment. How can you pay your driver, cover office expenses, and keep your trucking equipment in good condition when you aren’t sure when you’ll get the money owed to you?
Many things go wrong when you don’t have money coming in. Your drivers’ happiness is a priority.
1. Drivers Remain Loyal
ACT Research found that the long-haul driver turnover rate in large for-hire trucking companies was 89% in 2021. Private fleets and drivers specializing in less-than-truckload work had a turnover rate of 15%. Every time a driver leaves, you start from scratch. It’s wasted money.
While regular wages are important, studies find they’re not all that younger drivers want. Eight out of 10 younger drivers say company culture is essential. Manager support, peer connections, a positive work-life balance, and mentorships are also necessary. Make sure you focus on the whole picture to get loyal drivers.
A strong cash flow puts you in the best position to pay your drivers on time. It also helps you build a solid team of managers, mentors, and drivers who support one another.
Make sure you use your money wisely and ensure all workers enjoy the work-life balance they prefer. Some drivers might be okay with long-haul routes if they can bring a pet or significant other, so you should have insurance coverage for a passenger. They might want a yearly membership to a fitness center chain to stay in shape when they’re on the road.
Others might prefer to be home every night. They need routes that guarantee this. Plan schedules and benefits packages that meet their needs.
2. Your Employees’ Morale Remains Positive
Drivers seek a positive company culture. If office staff listen to creditors and debt collectors all day, morale drops. As morale drops, other workers pick up on the bad attitudes. Soon, everyone starts to doubt if the business is doing well. They will leave rather than risk losing their jobs.
When your invoice payments keep coming in, bills get paid, and there are no collection calls, it also boosts your credit score because you’re paying on time. This means your business credit isn’t affected by overdue or missing payments.
3. Paychecks Go Out on Time
Money is coming in, so payroll is completed on time. Not only does this keep your drivers happy, but it also helps you avoid state fines. Some states have strict rules that trigger fines and penalties if you’re even one day late paying your employees. For example, in…
- Arizona – You could be required to pay wages with added penalties of up to 3x the amount owed.
- Colorado – If you do not pay the wages you owe within 14 days of a written demand, penalties of 2x or 3x are possible.
- Illinois – You pay the unpaid wages plus 5% per month, and civil penalties of $250 or more are possible.
- New York – Employees collect their late or unpaid wages plus 100% damages, interest, and legal fees. Civil penalties of up to $20,000 may be imposed.
Those fees and penalties cut into your profits. You must pay wages on time, which requires a strong cash flow.
The Best Strategies for Stabilizing Cash Flow
While steady payments are essential, your clients may feel less pressure to pay you quickly. What are the best strategies for ensuring you have money coming in?
1. Keep Trucks and Equipment Well Maintained
Well-maintained equipment and trucks help you avoid unexpected repair bills. Your drivers aren’t halfway to their destinations when something goes wrong, leaving them stranded for hours waiting for a tow truck.
If something is seriously wrong, you have to send another truck to pick up the freight and deliver it. If that delivery is late, it could be disastrous. Regular maintenance prevents emergency repairs by pinpointing problems or worn parts while they’re still easy to fix or replace.
2. Reduce Deadhead Miles
Your driver is going across the country to deliver a trailer full of supplies. What plans do you have for the return trip? If your driver is pulling an empty trailer back, you’re missing out on a valuable opportunity to double your money.
Use load-finding apps to search for loads heading back to your city. You earn money on both outbound and inbound trips.
3. Lower Your Cost Per Mile on the Road
Your clients pay you a per-mile rate, and you want to make the most money possible on those miles. Keep your expenses to a minimum so that a large percentage of that rate goes back to you as profit.
One of the best ways to lower your expenses when your trucks are on the road is by embracing fuel discounts. When you’re saving money on every gallon you purchase, it reduces your operating costs.
A well-maintained vehicle also prevents emergency repair bills. Paying for routine maintenance, such as tire and brake inspections, oil changes, and fuel filter replacements, is less expensive than sudden, unexpected repairs.
4. Use Invoice Factoring to Keep Money Coming In
Invoice factoring is a financial arrangement between you and a freight factoring company. You sell your unpaid invoices to the factor at a discount. In return, you get paid immediately. You don’t have to wait months. Payments are in your account as quickly as the same day.
Don’t Wait Until It’s Too Late
Contact Saint John Capital today to learn more about freight factoring. With some of the lowest factoring rates, decades of trucking expertise, and options to choose which invoices to sell, it’s a smart way to boost your cash flow and keep your drivers satisfied.
