The Road Ahead: 
Uncertainties and Opportunities in the Transportation Industry

Learn how Marquette Transportation Finance can help your business grow.


Marquette Transportation Finance (MTF) offers alternative solutions to traditional lending that allow companies to quickly access funds to meet the daily demands of the transportation industry. With its flexible and customized packages, MTF provides financing for restructures and acquisitions, and can help companies improve liquidity.

Copyright © 2017 UMB Financial Corporation

Driver Shortage

Motor carriers across the nation continue to face a shortage of qualified, reliable drivers to meet freight and haul demands. This can spell profit loss and extra expenses with inactive trucks requiring all of the costs of maintenance, without generating offsetting income. 

Three main factors are at work in this nationwide driver shortage: industry growth outpacing driver supply, the need to replace the large percentage of retiring drivers, and the lack of qualified drivers. In 2015, the American Trucking Associations (ATA) predicted a shortage of 175,000 drivers by 2024. Combined with the other changes in the industry, finding drivers will be a top concern in the coming years.

About Marquette Transportation Finance

Marquette Transportation Finance, a subsidiary of UMB Bank, n.a. located in Bloomington, Minn., is a leading provider of accounts receivable financing solutions for the trucking industry, serving companies with annual revenue from $2 million to $400 million. Marquette assists trucking companies in meeting their working capital needs to drive growth, fund acquisitions, improve liquidity and fund restructures. MTF continuously works to implement industry best practices and remains up-to-date through its membership to ATA, TCA and state trucking associations in its regions. MTF is small enough to be nimble by controlling how it manages and offers its services, while also providing strength through its parent company, UMB Financial Corporation.

Shortage of 
175,000 drivers 

Regulations Chart a New Course

As with many industries, regulatory oversight can add training time, expenses and processes to everyday operations. For the transportation world, December 2017 begins the compliance phase of the electronic logging device (ELD) rule—drivers, carriers and manufacturers must begin installing and using Federal Motor Carrier Safety Administration (FMSCA) approved ELDs in all hauling vehicles. 

While many companies have already converted over to ELDs, for those that haven’t this regulatory change to improve drive time accuracy can be a burden on a company’s operational capital. Smaller companies may be unable to absorb the costs of implementing ELDs, while larger companies will have much higher costs associated with compliance. And, no matter the company size, some efficiency will be lost as employees are trained to use the new systems. 

Compliance may decrease cash flow and increase expenses for some companies, but others may leverage the opportunity to pick up new business. As carriers exit the market, savvy companies can pick up the slack which will require flexible financing to support rapid growth, even in an uncertain climate. In the tightening financial environment, obtaining financing to grow—and quickly—can be a challenge.

Risk Management Expenses

Insurance costs are a given in the transportation industry. Yet, insurance rates have risen more in transportation than any other commercial market—up 4 percent in the second quarter of 2017 and 5 percent in first quarter, according to MarketScout. This increase, compared to only 1 and 2 percent for other industries, will impact cash flow and profit margins across the industry.

DiAne Reed is EVP/ National Sales Manager for Marquette Transportation Finance. She has more than 35 years of experience in the transportation industry and is active in the industry as a member of the American Trucking Associations' Women in Trucking committee, the Truckload Carrier Association's Communications and Branding committee, and as a member of the North Carolina Trucking Association, International Factoring Association and Commercial Finance Association. 

Mergers and Acquisitions

Required regulatory compliance combined with rising costs of risk management and keeping trucks on the road, may result in carriers choosing to exit the market. This shift could increase the merger and acquisition opportunities for nimble companies ready to expand their market share. But, the uncertainties ahead may also cause lenders to offer less financial flexibility. If the number of carriers diminishes, but the remaining businesses are not able to take on the freight volume due to financial restrictions, the industry may see increasing volatility ahead.

Traditional Financing Challenges

All of the above factors have created unpredictability in the transportation market, and the last may have the most pervasive reach. Traditional lenders, like banks and equipment lenders, have limited appetite to finance an industry with high cash flow needs and uncertain expenses. Due to the industry’s bumpy road ahead, fewer traditional banks are willing to lend to transportation companies, and those that do will likely require conservative loan structures with restrictive covenants, and may tighten controls on current loans. The opportunities ahead—like acquisitions, mergers and increased business volume—may require freight companies to leverage themselves, other collateral or more receivables beyond many banks’ credit controls.

Moving Ahead

Growth opportunities intensify as the industry evolves. While some companies may decide to exit the market, enterprising transportation companies could leverage opportunities for growth, whether through acquisitions or increased business volume, as long as they can find financing to support their expansion. Despite the current volatility, the transportation industry remains a vital part of the U.S. economy, offering growth opportunities even in times of change.

According to Reuters, retail sales increased 0.6 percent in July 2017, demonstrating a return of consumer spending confidence, which may indicate a Fed rate hike by year end. But while the economy makes positive strides and responds to several natural disasters, the transportation industry expects a few twists and turns in the road ahead. Several changes in the industry landscape may affect profitability, mergers and acquisitions, and access to financing for some U.S. transportation companies. Following are five areas that may be bumps in the road for trucking companies.

Several changes in the industry landscape may affect profitability, mergers and acquisitions, and access to financing . . .



By 2024
Marquette Transportation Finance 

As specialists in transportation finance, we can help you unlock the power of your accounts receivable.

Whether you’re looking to access funds quickly to get you through a short-term crunch, or if you want a financial partner for the long-term that can meet your evolving needs, we can help.
Our packages are designed to grow and change with you, so you have the flexibility to meet the demands of your day-to-day operations today and in the future.

Every Marquette client receives sophisticated back office support providing critical analysis and insights, which can supplement your in-house accounting services.

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