When the COVID-19 pandemic took hold, businesses throughout the world faced a myriad of challenges. But through it all, the trucking and logistics industry kept on truckin’ – and served as part of a truly essential workforce.
Now, as businesses work to meet demand, the industry faces some distinct challenges, including:
- Limited inventory. Pent-up demand and material shortages have created a situation where manufacturers, and thereby dealers, are scrambling for inventory.
On the demand side, when consumers were unable to spend on services, they spent on durable goods, including cars and trucks. On the supply side, slowdowns and shutdowns have made raw materials harder to come by, making it difficult for manufacturers to get vehicles produced and out to dealers. Dealers literally can’t keep inventory on the floor, and in many cases, late-model units are commanding prices in the secondary market that are higher than original sticker ones.
- Talent shortages. More demand requires more trucks, which require more drivers. Add in a surge of early retirements among drivers during the pandemic, and the driver shortage has escalated to new levels. In 2019, the U.S. was already short 60,000 drivers – a number expected to grow to 100,000 by 2023. The shortages have led to fierce recruitment tactics, with some hiring from abroad and some offering impressive signing bonuses.
- Financing. In this environment, cash flow is the biggest barrier to growth and opportunity. Accounts receivable simply isn’t fast enough, and when inventory is available to purchase, dealers need to be able to act fast, often purchasing more than they would otherwise. They must have flexible financing programs of their own as well to meet their customers’ needs.
Many companies in the industry have benefitted from numerous government programs and benefits. But as these programs come to an end, and as supply chain shortages remain, dealers will need to adjust financing to fit market realities.
With a clear focus on driving sales and understanding business challenges, the Work Truck Finance division at Mitsubishi HC Capital America serves as a true partner dedicated to helping businesses in the work truck industry grow. By taking time to learn each dealer’s business model and goals, we pride ourselves on developing long-term relationships that go beyond transactional finance deals.
Our team also recognizes that dealers must be nimble and responsive in today’s economy. They need simplicity, speed, ease of doing business and a partner that understands the nuances of the industry and market. In response, rather than offering a “one-size-fits-all” type of financing package, – Mitsubishi HC Capital America develops individualized programs for each dealer.
COVID-19 has drastically changed the market for dealers. A good understanding of the dynamics and challenges can lead transportation companies to make educated, smart choices on finance providers who can serve as partners in unchartered territory. In turn, we’re here to make financing as easy, fast and tailored to every dealer’s needs as possible.
Mitsubishi HC Capital America, Inc. is a specialty finance company that provides financing services to commercial businesses across the United States and Canada. Focused on understanding clients’ business models and goals, the company creates customized financing programs for each industry and company it serves. A vast network of relationships and resources helps connect clients to broad networks and business solutions. Mitsubishi HC Capital America, Inc. and Mitsubishi HC Capital Canada, Inc. are subsidiaries of Mitsubishi HC Capital Inc., formed in 2021 through the merger of Mitsubishi UFJ Lease & Finance and Hitachi Capital.
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