Automation Risk – At this time, the risk related to automation specific for box truck enterprises is very low. Although automated driving technologies have to become more advanced, it will take a significant period of time before this technology can be fully integrated into the operations of a box truck business. Most importantly, while self-driving vehicles are becoming more popular, they have no ability to load and unload freight. As such, it will be at least fifteen years before automation risk presents itself for the operations of fox truck businesses.
Funding Risk – This is a relatively low risk as faced by box truck operators that they are able to seamlessly use specialty funding to acquire their trucks. Box truck businesses have substantial tangible inventories.
Local Competition Risk – This is primarily the greatest risk at his faced by box truck operators. In any area, there are always trucking enterprises that maintain 26-foot trucks that can deliver freight on a local and regional basis. As such, it is extremely important that box truck operators maintain highly control operating cost in order to ensure that they are able to remain pricing competitive.
National Competition – Most box truck companies operate on a local and regional basis. There are very few national level companies that provide this type of service through a hub and spoke model. As such, the risks related to national competition are rather muted.
Predicable Income – Through the use of load boards, freight brokerages, and freight dispatch enterprises, box truck companies are able to produce highly predictable income on a daily basis. These businesses typically charge at a per mile basis, which makes the income of these companies very stable.
Recession Risk – Box truck enterprises do face a certain degree of pressure during very severe economic recession. As these businesses focus on local and regional distribution freight, a very severe and challenging economic climate can impact the demand for services. In these instances, many box truck operators will work as moving companies on a regional basis in order to address this risk.
Recurring Income – Some box truck businesses are able to establish dedicated lane relationships with regional retailers and product distribution businesses that produce highly recurring revenue. It is relatively easy to establish these types of relationships, especially if the box truck operator is able to provide highly cost-effective solutions for regional freight transportation.
Skilled Labor – Unlike companies that operate large scale tractor trailers, the operation of box trucks does not require a CDL in most states. As such, these companies are able to quickly onboard drivers that can operate the fleet’s vehicles. As many box truck companies expand, they will hire CDL drivers that can provide interstate transportation, especially when the base of operations is based near a state line.
Scalability – These are highly scalable enterprises given that box trucks can be easily integrated into an ever-expanding fleet. Additionally, these businesses can also acquire existing companies that are in operation in order to absorb them into their operational ecosystem. These businesses can also integrate additional service lines, such as white glove freight transportation, rapid transportation, and related services.