1,000 Calls: Family-owned fleets meet trucking tech

Navigating the line between consolidation and innovation.

Editor’s note: At Vector, we spend our days talking to trucking companies steering through a fast-changing industry. This story is part of a series, ‘1,000 Calls,’ where our team breaks down lessons learned along the way. This week: Family-owned businesses meet trucking tech.

Trucking is one of the last industries standing in a world overrun by conglomeration. Where airlines, fast food restaurants, and automobiles have consolidated into mega-industries, in trucking you still find hundreds of thousands of local companies across America.

Private trucking fleets represent roughly one-half of the overall trucking market. The majority of these private fleets have 20 vehicles or less. First, let’s take a moment here to appreciate the endurance of these family-owned businesses. Second, why is this the case?

Family-owned businesses face an uphill battle in today’s globalized market, where economies of scale tend to weed out local players. But the “single origin” characteristic of many trucking companies may be the key to their success. That is to say that most of their primary inputs can be found locally: drivers, trucks, customers and software for scaling operations.

This endurance signifies more than just an admirable achievement. America’s businesses are diverse and dynamic because — at least in theory — anyone who meets the regulatory requirements can launch a business. Trucking companies demonstrate that this isn’t (yet) a lost notion. These businesses also have staying power, surviving for decades.

Generation next

Where family trucking businesses tend to lag, however, is an understandable skepticism about change. They might seem more nimble since they are managed by fewer decision makers, who are also usually more familiar with day-to-day operations and easier to reach directly (i.e. no re-routing to the corporate office). Still, these smaller businesses tend to use a consensus-based decision making process, and when spanning multiple generations, can hit ideological brick walls.

New technology has always been difficult for older generations to adopt. They have a scotch-tape solution in place, so why change? In Vector’s case, replacing manual document conveyance and filing with a digital system can seem unfamiliar or disruptive. The fact that new technology is necessary to compete in today’s environment resonates with the youngest members of these companies but may ring hollow with ownership.

Take the example of a Missouri-based family trucking company with 40 drivers that I recently called. I was surprised to hear a young teenager answer the phone.

“Hi,” he said.

“Oh, hi! I said. “Can I speak with Melanie?” (his mom, the business owner).

“She’s not here.”

Rather than kill the conversation, I decided to pitch him and explained in very simple terms how Vector could help get drivers’ paperwork back to the office. “Cool. I’ll give you my mom’s cell,” he said.

I called his mom’s cell. “Who gave you my number?” She asked angrily.

“Your son.” He saw some value, and his mom was softened into considering it herself after his inadvertent referral.

From an outsider’s perspective, I see that the profit margins in the trucking industry — even amongst the best companies are marginal. Efficiency-maximizing technology matters, and can provide that necessary competitive edge.

Whether to adopt new technology in trucking is no longer an option: As a trucking company you want to be easy to do business with, and you want to be easy to work for.

Want to learn more? Take our technology for a spin.