Whoever said running a truck business is easy has lied. The truth is, being a truck owner is quite challenging. The responsibilities are endless, and the costs to keep the business running are relatively high. Not a single day goes by when you do not think of ways to lower operating costs of the business.
When it comes to owning and operating a trucking business, regardless of the size, the truck owner has to face numerous financial challenges in one way or the other.
Perhaps the most pressing challenge is to manage fleet expenses. From driver salaries to fleet tires and everything in between, all these expenses can quickly pile on top of one another.
Whether you’re a truck owner or a fleet manager, lowering the operating costs for the trucking business remains your top priority. It is critical to find smart and efficient ways to lower operating costs without skipping out on the essential costs, such as maintenance and drivers.
With our extensive background and experience in the trucking industry, we understand the challenges your trucking company faces. That is the reason we have put together a list of some effective ways you can lower operating costs while still maintaining a quality fleet of vehicles.
One of the simplest ways to lower operating costs for your trucking business is to simply start monitoring your budget and see where your money is being spent. In addition to your budget, you need to create monthly profit and loss statements to see how much money you earned and lost.
With these two sets of information, you can track your expenses in a more accurate way. This will help you gain opportunities to get rid of unnecessary costs, and you will be able to bring your operating costs down.
Another effective way to lower operating costs is by considering limiting the size of your fleet. While this may not be feasible for all trucking companies, it is still a quick way to reduce your costs. Even reducing the size of your fleet by just a few trucks can drastically improve your operating costs.
However, the only downside will be increased maintenance costs for your remaining trucks as they will require more work. Having said that, most trucking companies find that smaller fleets are cost-effective and more manageable.
Investing in a smart, cloud-based transportation management software (TMS) is another effective way to lower operating costs for your trucking business.
With the help of a TMS, you can dispatch and manage loads, track your loads and drivers in real-time, automate internet fuel tax agreement (IFTA) reporting, create invoices and bills of lading (BOLs) effectively, simplify payroll, and have access to detailed business reporting and analytics.
A cloud-based TMS such as LoadStop offers all of these incredible features and helps you improve your trucking operations and reduce your operating costs. While it is true that investing in a TMS can be a new expense for you, the money and time you can save in the long run due to reducing manual tasks makes it a worthy investment.
There is no doubt that a broken or damaged truck can cost you a lot of money on repairs. Apart from spending money on repairing it, you will also be losing out on potential money you could have earned had the truck been in a better shape.
Regular preventative maintenance may look like a huge recurring cost, but you should consider it an investment strategy. The more frequently you maintain your trucks, the less likely they will break down. This can help you and your drivers spend more time on the road and less time in the repair shop.
Have you ever wondered what is the most important number associated with your trucking business? You may be surprised to know that it is none other than the cost per mile. While it may be a bit tricky to control, you will be glad to know that there are some ways to reduce the mileage on your fleet.
When you are aware of how much you are spending, you will be in a better position to identify areas where you can lower costs. With the help of advanced GPS and tracking technology, you can plan better routes, helping your drivers take the shortest route possible.
Similarly, you can set up geofencing areas and track how long the driver remains and where they have traveled within that area. As soon as the driver enters the area, the GPS on his vehicle will be activated, and you will receive an alert.
Drivers’ salaries are a major expense a trucking company must bear. Apart from that, drivers can also add to your operating costs with their poor actions and behaviors. However, you can handle that part and reduce fuel expenses by providing them with proper training to drive efficiently.
For example, you can educate them to drive vehicles at the most fuel-efficient engine speeds. Do not allow them to warm up the engine for more than ten minutes, and encourage them to avoid revving the engines when warming up the engine.
You can also tell them to avoid idling as it can wear out an engine much faster than many drivers realize and can wreak havoc on your miles per gallon average. Therefore, you can lower operating costs by training your drivers.
Freight theft is one of the biggest threats to the trucking company. In fact, cargo theft has been recognized as one of the most expensive crimes in the US. You would be surprised to know that thieves are extremely creative when it comes to stealing cargo and even trucks.
It is important to educate yourself and your drivers about cargo theft. You and your drivers should know how to identify threats and take the right steps to protect your freight.
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