Logistics in general, and the trucking industry, are frequently the engines that propel the economy forward. It is true for many countries, undoubtedly true for the United States.
Companies that provide trucking services constantly transport raw materials from suppliers to manufacturers and then deliver finished goods from manufacturers to consumers. Trucks haul more than 70% of all goods transported from one location to another in the United States. The trucking industry generates over $723 billion in revenue in just one year, in 2021 alone.
If you want to maximize profits and improve efficiency within your trucking company, this post looks at a few ways you can do this easily.
Identify Your Niche
Identifying the appropriate market or, even better, a specific niche of the market to serve is the first and most crucial step in starting and running a successful trucking business.
First and foremost, it is critical due to the high level of competition. For example, when it comes to dry vans, earning respectable revenues can be particularly challenging on the majority of markets, simply because there is too much competition from large carriers and other owner-operators attempting to pull the “easier” loads.
And this brings us to the second point, which is the importance of finding the right market from the beginning of the search process. As a result, when starting a new trucking company, it is good to concentrate on markets where the large carriers do not operate. To put it another way, think about hauling specialized loads.
Depending on the market you choose, the types of vehicles and equipment you buy or lease, the rates you charge, and the freight lanes you can service will all be determined by this decision.
Make A Business Plan
Large corporate fleets such as those operated by Amazon, Walmart, and other large corporations may dominate the market. Still, according to the numbers that refuse to budge, trucking companies tend to be small in size, with an average fleet size of six or fewer trucks. This means that individuals who own and operate small trucking businesses have the most significant influence on the trucking and logistics industries.
However far you are into your journey, having an updated and new business plan can help you to maximize profits and improve efficiency as you address your direction and goals.
Creating a trucking business plan should start with market research and end up with a clear, data-driven strategy that includes achievable goals broken down into manageable steps that answer all of the fundamental questions, such as:
- Where do you see yourself in 5/10 years?
- How well are your employees performing?
- What changes do you need to embrace going forward?
- Can you further niche down to improve efficiency?
- How is the market changing, and how can you adapt to these changes?
- Do you need to look at where you are based or move location?
Reduce Employee Turnover
According to the American Trucking Association, companies fail to retain drivers 87 percent of the time. According to a recent article in FreightWaves Magazine, the average cost of driver turnover is $11,500 per driver on average.
In a Driver iQ survey of recruiters, the most common reason for drivers to quit is a lack of overall compensation. The unpredictability of each week’s paycheck ranks fourth on the list of reasons.
Reduce Driver Speeding
According to a report published by FleetOwner, the American Trucking Associations found that a truck that travels at 75 mph will consume 27 percent more fuel than a truck traveling at 65 mph. Slowing down can result in significant savings.
Consider the following scenario: your truck travels 100,000 miles in a year, with 50% of the miles traveled on highways at 75 mph. Your vehicle gets an average of 5 miles per gallon at that speed. You can save 27 percent on fuel consumption by slowing down to 65 miles per hour, resulting in a 6.35 miles per gallon increase.
It costs $3.00 per gallon and $6,377 per year per truck to make the switch from 5 to 6.35 mpg over a 50,000-mile driving cycle.
Plan Your Route
Knowing in advance the best route to take and having up-to-date travel information can provide drivers with a more efficient way of reaching their destination. The requirements for reducing travel time have grown exponentially since the introduction of next-day delivery services, so maximizing routes and cutting down on accidents and delays is vital.
There are many excellent trucking GPS on the market, including;
- Garmin Dezl 780 LMT-S.
- TomTom Trucker 600/620.
- Garmin Dēzl 780/580/785 LMT-S.
- Rand McNally 85, 7 Pro, 8 Pro.
- Garmin Dezl 770LMTHD.
Accidents can be costly for a small trucking company. While this won’t immediately impact your bottom line, there are over 500,000 accidents involving trucks, tractors, or trailers. Having all of your drivers know exactly what to do and what not to do in an accident can prove to be a cost-cutting endeavor in the long run.
An accident can severely impact your delivery time and reputation, so having everyone on the same page and following a company directive is vital. In the first instance, your efforts should be with getting your driver and any injured parties the help they need. Then you need to have a process to inform authorities, your client, and other drivers to keep the wheels moving, so to speak. Then contact an 18-Wheeler Accident Lawyer if required.
Look At Driving Habits
Using an ELD (Electronic Logging Device), you can track things like hard accelerations, harsh braking, speeding, excessive idling, and fuel economy in real-time. Truckers can use this information to improve their driving habits and save money on fuel, which will help them save money.
Looking at the aerodynamics of your fleet is another way you can maximize efficiency and profits in your trucking company. How well your fleet performs on the road will impact how much each journey costs you.
A wind tunnel test to evaluate the aerodynamic performance of various drag-reduction concepts was commissioned by Transport Canada and conducted by the National Research Council of Canada (NRC).
The tests were carried out on a model of modern tractor-trailer combinations built to a scale of 30 percent. Wind drag created by the gap between the tractor and the trailer was tested, and it was discovered that for every foot the gap was reduced, the amount of drag decreased by 2.6 percent. This equates to approximately 213 gallons of fuel saved per tractor per year on average.
Maintenance has progressed from a preventative to a proactive approach. The use of technology such as ECMs (Electronic Control Modules) in conjunction with a wide range of sensors in vehicles can alert many issues before they cause component failure, allowing you to avoid towing and downtime.
Maintain your trucks regularly to keep them running smoothly and avoid costly breakdowns.
Ask For Feedback
If you don’t know what you are doing well or even doing wrong, you can not improve. Asking for client feedback is a great way to help you identify your strong points and weaknesses. Knowing what you need to change as quickly as possible can help you identify different areas you need to work on. This will reduce money and time wasted if something isn’t working and allow you to find new options in the future.
You need your customers to be happy. Happy customers mean more continued business keeping your trucking company moving more frequently.
As mentioned above, feedback is a great way to find out how you are doing. But working on that feedback is vital. Preempt what your customers want or need and implement this as much as possible. Be on time – not early or late, and get your load delivered without freight claims or delays. The happier your clients, the more work you are likely to get.
Change Your Tires
Tires with low rolling resistance (LRR) are installed on many fleet vehicles to save fuel. LRR retreading also has the additional benefit of extending tire life.
According to the US Environmental Protection Agency, long-haul class 8 tractor-trailer tires can reduce costs and emissions by 3 percent or more compared to conventional tires.
With a vehicle that travels 100,000 miles per year and fuel that gets 6.5 miles per gallon, you will need to purchase 15,385 gallons. A 3% reduction in fuel costs translates into 461 gallons less energy consumed in a year. At $3.00 per gallon, that’s a $1,383 savings over the year.
Additionally, keeping your tires inflated to the manufacturer’s specifications can save you money on gas and extend the life of your tires.
Making your small trucking company more efficient takes time and investment in different areas. Pay attention to the tiny details and your delivery promises to clients to ensure you have enough work to keep you on the roads all year round without paying over the odds to do so. How much you pay for your fuel, maintenance, and your employee’s behavior driving patterns all contribute to your efficiency, so looking at the bigger picture and putting the proper training and plans in place will benefit everyone in the long run.
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