Fleet Management

Fewer Small Transportation Companies to Expand

April 06, 2008

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Fewer small transportation companies are considering expansion, instead planning to focus on meeting customer needs and improving employee productivity, according to the results of the latest Small Business Research Board poll.


33 percent of the small transportation businesses responding to the fourth quarter SBRB poll co-sponsored by International Profit Associates said they are planning to expand their business during the next 12 to 24 months. This was six points fewer than the 39 percent who felt the same during the third quarter 2007.

Pparticipants in the study, said they are re-calibrating their operating plans to contend with customer issues and human resources as opposed to making investments in facilities and processes.

Of those companies planning for expansion, 60 percent said they will do so relying mostly on customer based programs, twice the 30 percent who participated in the previous poll during the third quarter of 2007. Providing more services, adding new products and enhancing customer service were each mentioned by 20 percent of the participants, outranking expanding at current locations (15 percent) and adding locations (10 percent). The 25 percent who said facilities based-growth solutions was 18 points fewer than the 43 percent who reported the same one quarter earlier. Acquisitions are being considered by another 10 percent of the fourth quarter respondents.

Human resources filled the top three spots in the rankings of elements which could best improve their business productivity, according to the SBRB poll. Improved staff training, enhancement in employee incentive programs and adding staff topped improvements in existing automation or technology or the addition of new automation or technology, which were fourth and fifth respectively.

The reduced plans for expansion parallel the drop in the recently reported SBRB Transportation Small Business Confidence Index (T-SBCI), which sat at 35 during the fourth quarter of 2007, considerably lower than each of two previous industry indexes. Concern about the direction of the economy and modest hiring plans, two key indicators comprising the small business industry confidence index, contributed to the lower T-SBCI.

During the fourth quarter of 2007, only 29 pecent of the owners and managers responding to the study said they expect improvement in the economy during the next 12 months. Concurrently, only 19 percent of the participants said they plan to increase hiring during the same period. The majority of owners and managers, however, said they believe revenues will improve with 60 percent expecting them to increase during the year.
The current transportation industry confidence index is 1.33 points higher than the 33.67 reported for all U.S. small businesses during the fourth quarter of last year.

More than 950 small business owners participated in the nationwide poll.


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