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Stability.
Job security.
Financial stability.
When drivers like you describe why they think trucking companies are great, these are typically the top characteristics they name.
But what does stability mean in the trucking industry? And why should you look for it when you’re choosing a new trucking company to work for?
Now more than ever, people are looking for stability out of their jobs. Countless companies had to shut their doors during the height of the pandemic because they couldn’t stay afloat — trucking companies included. The most financially stable companies stayed in business and even thrived.
The future is uncertain and you want to find a trucking company whose doors will still be open tomorrow and the next day and the next day…
As the vice president of driver recruiting here at Anderson Trucking Service, I’ve spent two decades in the trucking industry. I’ve worked for both large and small trucking companies, so I know a fair amount about what it takes for a company to be stable and why it benefits the driver.
In this blog, you’ll learn:
- Why stable trucking companies benefit you
- What stability means in the trucking industry
- How to find a stable trucking company
When you’re finished reading, you’ll be able to evaluate if the trucking company you’re driving for is stable, why it matters and whether or not you need to start looking elsewhere.
Why the Best Trucking Companies are Financially Stable and How it Benefits You
Financially stable companies provide you the most benefit as a driver. When the company is reliable, you don’t have to worry that they’ll close overnight, leaving you without a job. Finding stability is especially important if you’re looking to build a career with one company and advance your driving career.
There are countless horror stories of trucking companies closing overnight and leaving drivers stranded.
Consider Celadon, which closed overnight in late 2019. Almost 4,000 employees — over 2,500 drivers and almost 1,300 office employees — lost their jobs. Drivers had no idea what to do with their freight or their equipment and they couldn’t get in touch with anyone from the company.
It left thousands of drivers in awful situations. Not only were they out of jobs, but they had no way to get home. Fuel cards were deactivated and after drivers got to headquarters to drop off their trucks, the company couldn’t pay to get a lot of them home on a bus.
Drivers had to leave a lot of their possessions behind because they couldn’t take them with them on the bus to get home. Even worse, some drivers with pets had to pass them over to other drivers because they couldn’t take them on the bus.
While this is obviously an extreme case, the story of Celadon shows that even the largest carriers are vulnerable and a carrier’s size doesn’t always indicate that it’s stable.
There were signs that Celadon was struggling financially for a few years. If you notice any signs of instability trust your gut.
When you work with a stable company, the last thing on your mind should be fear of getting paid or fear of not having a job tomorrow.
A stable company will provide you peace of mind so that you can do what you need to do out on the road safely.
7 Signs of a Stable, Reliable Trucking Company
A stable trucking company is a company that is in good financial standing and isn’t relying solely on loans or a line of credit to get by.
All the best trucking companies claim that they’re stable, but these are good indicators of a stable company:
- Debt-free
- Timely payments
- Good CSA scores
- Loyal customers
- Well-established
- Well-maintained equipment
- Published financial records
1. The Company is Debt-free (or Not Relying Solely on a Line of Credit with the Bank)
Some companies are debt-free, some rely solely on a line of credit with the bank and some companies may have a line of credit that they don’t use frequently.
Debt-free trucking companies are rare, but you can be certain that the few that are are among the most stable of the stable. Other companies may be financially stable but they may use a line of credit for unplanned purchases or they operate on cash reserves. Some companies may operate entirely on loans. They have a line of credit and use it to pay their day-to-day bills. They pay enough toward the loans each month to get by.
COVID was a good example of an extreme test on which companies were truly stable financially. Many smaller companies — or companies that were relying on loans — went out of business because they couldn’t hang on (or they really struggled). On the other hand, debt-free companies didn’t feel that same level of stress.
Small and mid-size carriers don’t always have the revenue to run debt-free, so they may rely on lines of credit. It can be harder to build up a cash flow, especially if there are only a few trucks in the fleet.
If a company isn’t publicly traded, you may not be able to learn about its finances. However, you can generally trust that a debt-free company is financially stable and can endure hardships like the ones brought about by the pandemic.
2. Drivers Get Paid on Time
A company that is struggling financially may not always be able to pay drivers on time. They may withhold payment until they get paid by customers first.
In smaller fleets, drivers will typically see signs of financial distress early on. As the company tries to close the debt to income ratio, you may experience pay cuts or delayed payments. You may not receive the pay you were promised.
If your payment is ever delayed, you should always ask questions. Look for other signs of instability in the company.
3. The Company Has a Good CSA Score
A poor Compliance, Safety, Accountability (CSA) score can be indicative of a high-risk carrier that may not be stable. The higher the score, the worse it is.
A company’s CSA score could be high because they have equipment problems that are leading to accidents. Countless accidents caused by equipment problems are a strong indicator of financial instability. The company may not have the funds to fix its equipment.
A poor CSA score also indicates that the company may not be prioritizing safety. When safety isn’t prioritized, the company is at risk of significant penalties if accidents occur. The financial penalties can be so severe that carriers are forced to close overnight.
On the flip side, a company with a good, low CSA score is indicative of a safety-driven company.
As a driver you can look up company trucking scores by visiting the Federal Motor Carrier Safety Administration (FMCSA) CSA score website. Remember: The lower the score, the better.
Please note: performance data is available to the public but final CSA scores are not.
4. They Have a Strong Customer Base
When companies start getting into financial trouble, there are clear indicators. Not only can their CSA score start dropping, but they can start losing customers. Customers don’t want to work with companies that have faulty equipment or a poor safety score; it puts their freight at risk.
This is where a company’s CSA score can tie directly to its customer base. Enough information about CSA scores and overall company performance is released publicly for customers to determine if they feel comfortable working with that company. They may choose not to work with a company because their CSA score is too high and could put their freight at risk.
A low CSA score gives carriers better access to high-profile clients, great freight lanes and an increased freight rate. Trucking carriers with a low CSA score can demand higher prices to haul freight.
A company that isn’t known for being stable or reliable may struggle to get consistent freight. Customers may not want to work with them so they could have to rely on a brokerage. If the spot quote market were to tank, your wallet would be directly affected.
If you notice that your company is losing customers left and right, you should start to question the stability of the company, your paycheck and your job.
Conversely, if you’re searching for a new company, ask your recruiter about their customer base. Loyal customers that have been around for a long time are a good sign. If the company acts as an in-house carrier for a lot of companies (meaning they’re the only carrier that hauls their freight), that’s also a good sign.
5. They’ve Been Around for Generations
A trucking company that has been around for generations is a strong indicator of a stable company.
A company that’s been in business for decades is much less of a gamble compared to working at a brand-new trucking company. You’re going up against years of experience in the industry versus a couple of years in the business.
6. The Fleet is Well-Maintained
If the fleet is very old and not well-maintained, the company’s stability should be in question. They may not have the cash flow to invest in newer equipment.
One clear sign that a company is struggling financially is bad equipment or equipment that is only partially repaired. For instance, companies may only repair what’s absolutely necessary to keep the truck running.
You may see a truck that has mismatched colors because they couldn’t afford to repaint the truck after a repair or accident.
7. Their Financial Records are Public
While all the signs above are certainly good indicators of a company’s stability, the only way you can truly know how financially stable a trucking company is is by reviewing its financial records.
Publicly traded companies have to reveal their financial records. Read their financial statements if you can find them. They could be difficult to understand, so you may want to consult your financial advisor if you have one. They can help you decide if the company is financially sound.
How to Find a Financially Stable and Reliable Trucking Company
Finding a financially stable trucking company ultimately comes down to taking the time to carefully research the company.
First, look at financial records if the company is publicly traded. If you can’t understand what the published records mean, enlist someone to help you.
Next, find out what drivers are saying. Are they saying that there’s not a lot of freight or that the equipment is always broken? Are they getting paid on time? Is their dispatcher always changing? High office turnover is a sign of instability.
Lastly, you have to talk to your recruiter and be thorough in your questioning. This is your chance to ask about the company’s history, debt and customer base. Make sure you are satisfied with their answers before you commit to orientation.
After you talk to a recruiter, you may want to go back and talk to some drivers for that company to see if what the recruiter said matches with their experience. Better yet, ask your recruiter for the name of a driver you can talk to. If they won’t give you a name, take that as a warning sign.
Work for the Best Trucking Company
As a truck driver and a crucial part of the economy, you don’t want to worry about the state of your job or your hard-earned money. You have a difficult, stressful job with hundreds of decisions to make every minute. Your company’s stability should be the last thing on your mind.
Take charge of your career. The decision to find the best trucking company is in your hands; you just need to take the time to be thorough and selective in your choice.
To narrow down your search, we’ve put together a list of the best trucking companies and the best companies to lease with.
On the other hand, maybe you’ve been nodding along to everything in this article because you know you’re working for a stable trucking company. If you’re content with the company you’re working for, consider if you’re also happy with your performance as a driver. With a few quick tips and trips, you can trip plan like a pro, maximize your time out on the road and boost your income.