If you’re looking for ways to increase your trucking company’s income, your first idea might be seeking strategies to generate more profit. But the reality isn’t as easy as you might imagine. Why? Because it’s way more difficult to generate income than it is to simply cut those expenses that might hold your business down. The trucking business can be a great way of generating profit, but you can just avoid those challenging trucking expenses. To be more precise, you need to identify, decrease and then avoid expenses.
Running a profitable business isn’t easy. But when you run one and still run out of money, it means there is something wrong with the way you manage your cash flow. According to a U.S Bank report, 82% of businesses fail due to poor cash flow management. They fail not because they can’t deliver good service or engage customers, but because they can’t manage cash flow. The same thing goes to truck businesses, and if you don’t come up with a working trucking business plan anytime soon, you could end up faced with a major cash flow issue that could impact the entire company.
In this article, we’ve gathered a few strategies that might help you with some of the trucking costs for your fleet.
Keep track of your fleet expenses
Before deciding where you should start to eliminate expenses, take your time to understand where your money actually goes. There are numerous companies out there who operate without having a certain budget. Instead, these companies work on the idea that they can simply guess how many different elements cost their business. So apart from having a basic profit and loss report, companies don’t really know their actual expenses.
Typically, you should be aware of every penny you’re making when you dispatch a vehicle, transport goods or make a delivery. So, if you are avid to reduce costs and increase profitably, one great way to do it is to make sense of what you already have. Therefore, ensure you keep an eye on your inventory, including office supplies. Take your time to log every penny spent and earned. In case you are still insecure with the way you manage profits and loss statements, operate ratio, debt ratio or budget, be patient and take some time to learn how things work.
Things take time, so instead of making choices you will regret later, allow yourself enough time to master essential elements without which your business can operate. There are lots of software tools and resources that can help you keep better control of your business’s numbers. For instance, time tracking software tools are excellent if you need to keep track of your business finances, customers and follow your drivers progress.
Rely on technology to avoid unwanted costs
Technology can be your fleet’ s best friend when used accordingly. Technology in today’s trucking industry has found new ways to make it, easier, quicker, more accurate, less taxing and safer. So, implementing new technologies not only help you make life better for fleets and drivers, but it will also help you avoid unwanted expenses. For instance, vehicle video systems may defend your fleet and drivers in case of accidents and potential phoney insurance claims. These are highly vital as those looking for a payday can rely on a false claim or even run into a truck, knowing that commercial transport companies can be a nice juicy target.
Always watch fuel costs
Every business that relies on transportation knows that the highest costs in the industry come from fuel. Of course, that doesn’t actually mean you’ll need to cut fuel, but there are a few things you can try to ease this financial pain.
- Track how much fuel use each track and driver
This is an absolute must if you want to avoid unwanted expenses. Tracking fuel consumption will help you identify at the right time how much it adds up on a weekly, monthly, quarterly and annual basis. So, you might understand what to expect in future fuel costs. Moreover, you might also be able to understand which truck requires improvements or which of your drivers necessitate supplementary training.
- Consider rewards cards
There are various reward programs and fuel perks you can find on the web. Such programs offer points and programs your fleet can use on other purchases.
- Look for less expensive stations
As you probably know, fuel prices can go crazy. Prices tend to differ from one location to another, especially when travelling across the country. Today, you can easily find websites, apps and communities that can help your fleet keep track of gas prices in various regions. Ask your fleet to fill up in the least expensive regions when possible.
Regular Truck Maintenance
It goes without saying that if you need to cut costs and avoid surprise expenses, you should perform regular maintenance to your fleet. In fact, commercial truck drivers have to perform such maintenance on a daily basis in order to comply with the FMCSA and DOT. Why? When your drivers have to be inspected by the DOT, your driver’s maintenance records must look impeccable and it’ s your duty to make sure they are doing their job if you want to avoid expenses. By maintaining your fleet’s engines, electrical system, tires and breaks, you ensure that everything will operate in its prime. That being said, a fleet which is fine-tuned to fit its expected performance will be a way better candidate when it comes to fuel consumption. Keep in mind that each truck is unique, so the same stand for your drivers and their driving patterns. So, you will have to fine-tune your fleet on a regular basis to keep them operating at their maximum capacity.
As a trucking business owner, you’ll need to understand that only by working together with your drivers as a team, you can get the most out of the commercial truck and trailer effectiveness. By working together with your drivers and implementing fuel-saving strategies and technologies, you can stand a greater chance at cutting costs.