It's no secret that goods travel by truck at some point during their journey. And those services require money to change hands. In 2020, the trucking industry generated $732.3 billion in total revenue, according to the American Trucking Associations.
Big money means big responsibility for CFOs. But being a finance chief in the trucking industry includes more than crunching numbers.
"I am involved in all aspects of our company," said Ravi Tulsyan, CFO of XPO Logistics. "Our company structure makes me a cross-functional CFO who gets very involved in the strategic priorities of the business, like growing revenue and making investments."
Christian Lee, CFO at broker and software company Transfix, said his responsibilities include compliance, accounting, budgeting, collecting from shippers, paying carriers and more.
"What has become increasingly important is capital, capital allocations and having available capital all the time," said Lee. "I help decide how we invest that capital, what we want to do to grow the business."
These days, technology integration is a large aspect of growth for trucking firms and companies across industries. That is evident in the keywords Sean Maharaj, managing director of consultancy AArete who has logistics as one of his specialties, looks for in CFO resumes:
- Acceleration of revenue
- Regulatory management
- Supply chain enablement
More than finances
For Lee, overseeing capital includes having decision rights across functions. He said he helps decide how, where and in what to invest, even when it comes to things like talent and technology.
The advanced technology exhibited by Otto, Tesla and Amazon have forced other organizations to mature quickly. Maharaj said that has changed the responsibilities of a CFO dramatically in the seven years since he got involved with that sector.
While Tulsyan still has to produce accurate financial reports and maintain a strong balance sheet, his job also includes setting strategy along with other company leaders to drive positive performance in the long term.
"We need to use tech to drive productivity," he said. "So, we are constantly looking at digital tools that will do this."
Maharaj noted that someone born and raised in a family-run organization may not be the right person to make critical decisions about technology. Doing so requires a deep understanding of operations and the ability to lead a team of financial individuals before drawing those conclusions, he said.
"We need to attract, retain and drive talent," Tulsyan said. "To do that, CFOs must work closely with human resources to make sure we are doing everything possible to attract the best talent, develop that talent and provide our professionals with their desired career path."
Together all staff can cross-train. Financial personnel will learn non-finance roles, and non-finance people will get financial experience, said Tulsyan.
By doing this, the quality of analysis and the ultimate decision-making gives people new perspectives, which also generates creativity, he said.
Moving forward fast, but not too fast
While technology has already grown in importance for CFOs, it is only set to increase.
The future role of CFO will become more data-driven, technology-based and customer-centric, said Maharaj. Functions may become much more mechanized, including automating the back-office systems.
Tulsyan said he sees that already happening at XPO.
"We’re automating our back-end processes to drive costs out of the system, but also to free up people so they can spend more time performing analysis versus collecting data," he said.
"I help decide how we invest that capital, what we want to do to grow the business."
CFO of Transfix
Besides investing in technology, companies will need increasing amounts of capital and the CFO will be the one to identify the sources of that capital, said Lee. In addition, there are likely to be consolidations, as well as mergers and acquisitions — all matters that involve the CFO.
But businesses should beware of moving too rapidly, Maharaj said.
A number of investments in technology have accelerated so quickly that there's not enough oversight. Investments need to make sense, he said, and positively impact the business, the profit and loss, and the shareholders.
"The role of CFO will continue to evolve," said Maharaj. "Fleets are turning into tech companies that provide trucking services."
The world has gone digital and there's no turning back, said Lee.
Clarification: Christian Lee's quote was clarified to more accurately reflect his role in investing and growing the business.