Why Backloading is a Dead End for Truckers in the Philippines: An Analysis of the Drawbacks

Backloading is a form of transportation when truckers only get paid for one leg of transporting goods and still have to cover the costs of the return trip. As a result, truckers only receive payment for half of the trip while still having to pay for both the outward and inbound trips.

Backloading is based on the idea that the trucker can find another consignment to pick up on the way back, which would help offset some of the expenditures. However, backloading has grown in popularity in the Philippines as more truckers turn to it as a means of making quick cash — with ultra-low trucking rates. Backloading, however, has a number of drawbacks that make it a less-than-ideal choice for trucking owners as a whole, as we will examine in this short article.

The drawbacks of backloading for Filipino truckers include:

Low-Profit Margins

Backloading frequently leads to reduced profit margins for truckers because they are only able to charge for one-way transportation while still having to cover fuel, maintenance, and other costs related to a round-trip trip. Otherwise, they will have to wait for another customer to book them in order to return back from their place of origin which may significantly increase expenses because of low turnover.

Increased Operating Costs

Backloading increases operating costs for trucks by prolonging transit times or reducing utilization rates, which leads to higher fixed costs or general and administrative expenses

Reduction in Reliability

Backloading makes it more likely that a trucker may miss delivery dates or be unable to pick up products on time, which has an impact on their reputation and reliability. As a result, the trucker may lead to loss in customers.

Loss of Control Over Freight

Backloading frequently leads to a loss of control over the cargo being transported, making it harder to manage and monitor the products and raising the risk of theft, damage, and loss.

Unpredictable Scheduling

Backloading can lead to unexpected scheduling, which makes it challenging for truckers to efficiently schedule their journeys and deploy their resources.

Otherwise, they will have to wait for another customer to book them in order to return back from their place of origin which may significantly increase expenses because of low turnover.

While backloading has significantly cut the upfront costs of customers, in the long run, it may not be the best and most sustainable solution to long-term cost management, in additional it is also crucial for truckers to switch their attention from backloading to full truckload services if the Philippines’ trucking sector is to remain viable. Instead of focusing on ultra-low prices, trucking companies can shift their attention to offering consumers dependable and effective services which can help truckers raise their profit margins, lower their operating costs, and improve their reputation. To increase productivity and cut expenses, truckers should also make investments in technologies like GPS tracking, digital invoicing, and online platforms. Truckers in the Philippines can contribute to the improvement of the trucking sector and create a successful and sustainable business by concentrating on full truckload services and leveraging technology.