Window of opportunity: how to open a business in the US during a crisis and why to do it

Hello! Timur Mirzaev is with you again. For those who don’t know me, I’m originally from Uzbekistan, and in 2013 I decided to take a risk and move to the USA. Now I have 9 years of work in the US transport industry behind me, several large companies and impressive experience that I would like to share with you, which is what I am actively doing in your Instagram. Subscribe!

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The crisis is already here: why it started and how long it will last

The crisis in the US truck industry began along with military operations in Ukraine. It would seem, what does the United States have to do with it if the war is in Ukraine?.. The fact is that the United States is participating in this war: they are fighting not at the front, but in the diplomatic arena, which greatly affects the domestic economy and politics. In addition, Russia and the United States are closely connected by trade relations, and the turnover of this cooperation has now significantly decreased. In particular, the United States imported a lot of oil from Russia, and now this has been suspended due to sanctions. While the States are adapting to new realities and trying to resolve the situation, the economy is suffering.

And so, with the outbreak of war in Ukraine, the crisis in the United States also began, there was a disruption in the export and import of goods. Now the ports in the States are practically free, but before the start of the war there were huge queues at the ports; workers did not have time to process the flow of cargo. At that moment, in all port states, cargo transportation was more expensive than in non-port states, demand was very high. Today there is no such demand, the amount of cargo is decreasing and because of the war, fuel prices are rising - the balance of supply and demand is collapsing, which means that prices for cargo transportation are beginning to fall.

China played a role in the formation of the crisis, a hard lockdown was introduced there, due to which Shanghai was closed, and at the same time, Shanghai ports - one of the largest in China. This caused delays in deliveries to the United States and greatly contributed to the overall decrease in cargo volumes.

Another reason for the crisis is the election race in the United States. During this period, major players in the American market traditionally slow down their activity, taking a wait-and-see approach, awaiting the outcome of the elections. For large businesses, it is important who in power they will have to work with next - Republicans or Democrats. Because the policies of the parties are very different and it is important for business to adapt to new political realities in a timely manner.

Photo: Instagram / timmirzaev

The shortage of materials and spare parts added additional complexity to the crisis. If, for example, your truck breaks down now, its repair may take several months due to a lack of parts. Previously, the problem could be solved in two days, but now it can be solved in two months. The difference is colossal. In my truck company, for example, we have already encountered this problem and are expecting almost 10 trucks to be repaired. That is, as you understand, a simple one costs a pretty penny. The problem arose partly due to the widespread closure of production in the States during the period of covid restrictions, and partly due to a sharp decrease in supplies.

The crisis arose due to the combination and coincidence in time of all these reasons, and the market sank significantly. At this stage, all truck companies suffer to one degree or another. We now charge the same amount for cargo as in pre-Covid times. COVID-19 has given impetus to the growth in popularity and demand for cargo transportation, and if not for all the reasons listed above, there would have been a completely different market situation - in our favor.

Just imagine, for two years we were paid two or even three times more, and now there has been a rollback. Naturally, when the market fell, this contrast was felt strongly. In addition, the price of fuel has more than doubled. It turns out that we are now giving away the margin that we were supposed to take for ourselves for fuel. Truck companies are now almost all at a zero point, not particularly earning.

Although in my practice there were times of crisis (in 2016 and 2019), when we worked in the red: trucks were driven, the team serviced them, but in the end we didn’t get anything from it. Those companies that managed to survive those crises are responding adequately to the current situation. Mostly, I think, companies are closed that did not see a bad market and were not prepared for the crisis.

The main difficulty of this crisis is the unknown. It is not clear when all this will end, because each of the reasons I have indicated can drag on indefinitely. However not all that bad, there are already positive dynamics. And it lies in the development of e-commerce, which has stepped far forward. The more it develops, the greater the demand for cargo transportation. We all hope for her now. While e-commerce is booming, someone needs us.

How to save your company in a crisis

1. Based on my experience, I can say that the best thing to do in a crisis is to optimize and reduce costs.

It may seem to you that there is nothing to cut, but believe me, you can always tweak things somewhere - cut staff, close some offices, parking lots, refuse paid subscriptions to some programs, cut salaries. Here it is important to do a competent financial audit so as not to make a mistake. Knowing your exact expenses and income is the basis. Any successful business is built on numbers and calculations; you can’t do without them.

2. Another key element of the trucking business is networking.

We often underestimate our relationships with clients, brokers, partners or drivers. They need to be built and played for a long time, and not run from one company to another for discounts, high rates or some other kind of lure. By playing the long game, you earn reputation for your business, which then affects access to more expensive segments.

We approach building relationships within our companies very responsibly, we go to personal meetings, give corporate gifts, and constantly keep in touch. During a crisis, the role of relationships increases even more. For example: if a broker has a choice between a company that he knows, trusts and maintains excellent relations, and a new company or one that, for example, does not treat the broker so well and fulfills its obligations also so-so, then it is obvious that he will give preference for the first. So that (first) company will pick up the best cargo and earn more.

Photo: Instagram / timmirzaev

Developing my projects, I always pay special attention to building relationships. Now I see the results and I can say that even despite the crisis, we manage to keep the bar and outperform many of our competitors in the ratings.

3. No need to hope that everything will be fine, you need to act and adapt to the current realities.

And all this must be done quickly. Decisiveness in a crisis is worth a lot. In difficult periods, I am guided by the phrase: "Whatever does not kill us makes us stronger." Do not sit still, look for opportunities to improve something, optimize, tweak some shortcomings.

Such an opportunity could be the purchase of fuel cards. For trucking companies, they are especially popular during a crisis, as they allow them to competently manage and control fuel costs. As part of our company CityFuel, we provide such cards and help truck businesses make money by refueling their trucks. We currently have about 2000 of our fuel cards in use. With us, customers save up to 70 cents per gallon of fuel at all major gas stations. We also provide credit to our clients, that is, you will not need to top up your card - the funds will already be credited to it. First you use it, then you pay.

Is it worth starting a truck business in a crisis

Yes, it's worth it. A crisis is a unique opportunity for newcomers to get started. Because entry is not so expensive, there are not many people willing to invest their money in the business, trucks are more or less accessible (their cost has dropped a little) and there are drivers. So go for it! Read more about how to start a truck business in America and what investments are needed for this. here.

What will happen next

This situation cannot last long. The American economy is a powerful machine that has experienced more serious crises. And if you take the last 30-40 years, you will notice that there have always been not enough truck drivers, which means that the cargo and the demand for their transportation were, are and will be. In any case, I believe that it will not get worse. I am sure that when the situation is resolved, the truck industry will grow very quickly.

More interesting information about business and life in the USA can be found in my Instagram by hashtags:

• # team_pro_business - here I write about business ideas, startups and doing business in general;
• #time_habits - here I talk about my good habits that help me stay effective in life and business;
• #team_hobby - under this hashtag, I publish what helps me stay in shape and restore energy reserves;
• #team_development - well, here I share useful books / films / podcasts and other resources for self-development;
• #time_personal - under this hashtag, look for a story about my move to the USA, the beginning of my business journey and the launch of my first offline business.

Read also on ForumDaily:

A country of opportunities and fierce competition: how an immigrant can open a business in America and not go bust

Turnkey business in the USA: with what investments you can start your own business in America

Trucker work in the USA: how long do you need to study, how to find your company and where they pay more

Truck business in the USA: where to start, what to do and where to go

How to open a business for an immigrant in the USA: all the nuances from A to Z

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