The trucking industry is most certainly one of the most profitable businesses in the globe these days. With billions of goods being transported, running a company in this field can be very lucrative. But more than the great deal of profits, running a trucking business offers other amazing perks for all staff. You get to travel, see new locations, and experience more independence and less micromanagement. Most of all, it provides a supportive community.
However, just like any other business, running a trucking company comes with huge operational and fleet costs. Without proper control and management, these business costs can go up, disrupting your entire cash flow. Find out how you can better control and reduce your trucking business costs in these strategies.
Track your budget
This tip is quite general but a critical one. Failing to monitor the budget of your trucking business is absolutely one of the biggest mistakes you can make. Seasoned entrepreneurs highly recommend tracking your business budget every month or every week if necessary. If you’re experiencing subpar profit margins, cutting expenses is usually a better way to improve rather than shooting for higher earnings. For effective budget monitoring, make sure to create an inventory containing unessential items on your monthly expenses and check what’s affecting your overhead costs.
Outsource accounting and HR
Outsourcing services are among the most popular recommendations for businesses, especially small ones and startups. In running a trucking company, it’s best to focus on your strengths and expertise, such as arranging deliveries, fielding orders, and operating fleets. Hand out the other tasks to professionals such as insurance, payroll, billing, and human resources. While it comes with upfront costs, hiring a trucking bookkeeper or HR personnel can save you more in the long run. They can handle your money more efficiently, ensuring that everything is where it should be.
Educate your team
One vital ingredient for running an efficient and profitable trucking company is having educated drivers. If you have drivers promoted to dispatchers, it’s important to invest time and effort into improving their managerial expertise. The trucking industry has seen tons of problematic operations caused by inexperienced staff, so make sure to educate and train your people.
Recognize the errors in the deliveries and plan out what skills and knowledge your team is lacking. Doing so will allow you to boost profit margins and cut losses. Furthermore, proper training can also help your people to be more equipped for the work. This helps you avoid expensive lawsuits and compensation claims due to injuries and accidents on the job.
Watch the cost of fuel
This should come as a basic regular task for anyone in the trucking industry. Fuel is no doubt a huge expense for a trucking business. While it is still impossible to cut this out of your costs, there are several ways to save you a few bucks. The first step is to monitor the fuel consumption of your fleet and how it adds up on a weekly and monthly basis.
You’d also want to take advantage of fuel rewards programs and perks to get points and discounts during your purchases. Also, since fuel prices may vary from area to area, it’s helpful to track prices in different locations and fill up your fleet in the least expensive stations.
Plan the routes smartly
Another wise trick to help you reduce business costs is to plan your fleet’s routes. If you’re fleet is used to using main routes for the deliveries, have your manager check on alternatives that are shorter and with fewer stops. Not only do you get to make the deliveries done faster, but you can also reduce engine wear and gas emission, conserve your fuel, boost driver productivity, and enhance customer experience.
What’s more, alternative routes are typically safer for travel as they have less traffic. To help your drivers find the most efficient routes for their deliveries, you can try using a routing optimizer app. Doing so can help you cut operating costs and improve drivers’ efficiency while improving customer communication. Plus, it’s also a good way for your customers to track their orders or shipments.
Running a trucking company surely gives you the freedom of how often you make the runs or what load to haul. However, to ensure that you’ll continue to experience these perks, it’s critical that you first take control of your costs and try to reduce them as you go. By doing that, you get to share bigger profits with your people while growing your business at the same time.