How Owner Operator Trucking Cuts Costs with TMS Software

So you might be thinking of starting your own trucking business or trying to operate under an owner-operator lifestyle. Within its due diligence, you need to learn the ins and outs of the trucking business, especially when expenses are a major concern. The fact that you are already thinking about managing finances is a good sign. 

For a small business owner, focusing on how much money they are making and spending is important. You have to deal with recurring expenses like fuel or truck maintenance. In this blog we have identified those expenses and the ways to reduce them using a TMS. 

Key expenses that owner-operator trucking businesses face 

As an owner-operator, you have a lot to stay on top of in the form of financial. You must always be aware of everything, including monthly expenses and profit margins.

1. Fuel and toll 

Owner-operators need to budget for fuel, which can cost them tens of thousands of dollars a year. Making a monthly fuel cost per mile plan is the best method to accomplish this. This amount is determined by dividing the miles per gallon of your truck by the current fuel price per gallon. You may find the answer by multiplying that figure by the anticipated number of miles you will be driving.

Assume that your truck’s gas mileage is 6.5 miles per gallon and that diesel is currently $3.70 per gallon. First, divide 6.5 by 3.7 to get 1.76 if you want to drive 800 miles in a month. Next, multiply 800 miles by 1.76.

Approximately $1,408 per month and $16,896 per year would be the total cost of fuel.

Another expenditure you should think about is tolls, which can quickly mount up. Toll-free roads are available; however, they can increase your journey distance by a considerable amount. One choice is to rely on a toll management system to act as a liaison between your fleet and the tolling authority. 

Making digital payments is simple with a toll management solution, and these providers can also take care of problems like incorrect charges, saving you time and money.

2. Truck Payments

Your vehicle payment or payments are arguably the largest fixed expense for an owner-operator. Setting aside money each month for your lease payments is essential. Businesses that own their fleets of trucks can disregard this cost. Businesses who intend to purchase new trucks, however, need to consider those costs for the impacted months.

3. Maintenance

Maintenance and repairs are important costs associated with trucking. You must maintain your truck by the law’s requirements for road safety, and the state of your vehicles affects how much usage you will get out of them. Preventive maintenance is significantly less expensive than a major repair that could make it impossible for you to transport goods.

A tiny portion of your total spending should go toward truck upkeep and repairs. Additionally, you should consider tire repairs and replacements to be distinct expenses.

4. Insurance

One of the more complicated monthly costs that owner-operators must consider is insurance. To ensure that you are paying the appropriate amount for the coverage you are receiving, it is crucial to thoroughly weigh the costs and advantages of your insurance. 

Higher monthly premiums are associated with more coverage. But there are risks associated with reduced coverage. Health insurance and auto insurance are the two forms of insurance that an owner-operator must manage.

5. Food and drink

One significant expense that owner-operators may not anticipate is food and drink. The cost of dining out every day may mount up rapidly. Owner-operators, however, are eligible for a tax deduction called the Per Diem. For each full day of driving, the IRS lets you deduct 80% of $80, and for each partial day, you can deduct $60.

You still have to pay for these expenses even though they are tax-deductible. Buying food at the grocery store and keeping it cold in your truck is the simplest approach to reduce your expenses for food and beverages. Grocery shopping is far more affordable and healthier than dining out.

6. Tax Deductions

One of the most important items on your list of owner-operator expenses is taxes. If you qualify for deductions, you might be able to lower your corporate taxes. You must preserve receipts as proof in order for this to occur. 

Seek advice from a tax lawyer annually and maintain thorough documentation of your claims, expenses, and supporting documentation. There are numerous types of taxes, such as corporate, personal, fuel, and road usage taxes.

7. Permits and licenses 

Your yearly owner-operator revenue and expense planning should include permits, licenses, and other necessary paperwork. Each state will have different requirements for these fees and documentation. These five documents will probably need to be taken into consideration:

Business licenses: These permits let you operate within the borders of your government.

Registration fees: These are the licensing documents for your trucks.

Renewal fees: The amount you must pay each year to renew your licenses is known as the renewal fee.

Transport permits: This type of permission enables you to move cargo in compliance with legal requirements.

Vehicle inspections: Vehicle inspections determine your truck’s road safety rating before long trips.

How to reduce owner-operator expenses 

As you can see, owner-operators incur far more costs than the typical self-employed business owner, costs that necessitate careful documentation. Here are some ways you can reduce these expenses. 

Reduce Repair and Maintenance 

The increased repair and maintenance costs remain a significant concern for most owner-operators. The average cost of roadside repair, including tire repair, has increased due to inflation. 

Owner-operators can save on these expenses by using vehicle diagnostic data, as it would help them plan vehicle repairs in advance. With an ELD, they can check out the fault codes. 

This can help them make informed decisions on whether they want to repair the issue immediately or plan for future maintenance. However, resolving the issue right away can help reduce costly repairs.

Avoid ELD Violations

Failing to provide supporting documents could lead you to violate ELD regulations. ELD violations affect CSA’s Safety Measurement System (SMS) scores. Owner-operators running trucking businesses without an ELD could also be placed out of service for at least ten hours. 

Being out of service can bring severe financial consequences for you. You may end up paying hefty fines, facing heavy penalties and towing, and losing any money you would have saved while in the trucking business. 

The only plausible way to save money and avoid ELD violations as an owner-operator would be to get an ELD.

Automate IFTA Reporting 

Most owner-operators do their IFTA reporting manually, which is also quite time-consuming. Not only that, but manual IFTA reporting can also prove problematic in the future if they cannot interpret the handwriting or remember what happened on a particular trip. 

With an ELD at their disposal, owner-operators can keep track of their fuel mileage and get detailed reports for every trip. Advanced transportation management systems (TMS) also provide ELD integrations, helping truck owners automate IFTA reporting. They can also upload fuel purchases and receipts directly from their mobile device using the TMS platform. 

That way, owner-operators can save the time they spend on paperwork, avoid hiring third-party IFTA preparers, and save significantly on fleet costs.

Increase Fuel Efficiency 

Typically, long-haul trucks idle for about 1,800 hours every year. Annually, it may cost owner-operators up to $5000. Along with wasting fuel, one hour of idling per day for one year leads to 64,000 miles of engine wear.

Using a cloud-based enterprise TMS, owner-operators can accurately track and attain idle-time reports to reduce expenses, increase the fuel efficiency of the fleet, and consequently save on fuel costs. Another effective way to save money is by using fuel cards, as many fuel card providers offer discounts for using them. Fuel purchase tracking also becomes easier with fuel cards.

Trip Inspections

Failing to perform pre-trip inspections before hitting the road or post-trip inspections after you have reached the destination can cost you more money on repairs and maintenance. Hence, it is better to resolve small issues as soon as they appear before they turn into bigger problems and cost you more dollars. 

As an owner-operator, you are responsible for controlling the repairs and maintenance costs. You may not be able to bring more revenue for your business if your truck consistently stays at the repair shop.

Use an Advanced TMS 

Increasing business efficiency and streamlining complex trucking operations is the top priority for every owner-operator. A reliable and state-of-the-art transportation management system (TMS) can help you handle multiple tasks from a single window. 

Whether finding profitable loads, managing them, simplifying payrolls, dispatching and tracking loads, automating IFTA reports, and getting detailed reporting and statistics of your trucking business, you can handle all these tasks via an advanced TMS solution. 

Using a TMS, you can reduce the time spent on paperwork and administrative tasks, allowing you to focus more on saving time and money in the long run.

Reduce Insurance Premiums

Another one of the best owner-operator tips would be reducing insurance premiums. Since the trucking business is susceptible to substantial on-the-road risks, most owner-operators find trucking insurance quite expensive. 

The majority of the time, the insurance costs drastically increase, and this happens because some owner-operators have applied for premiums that they don’t even need. 

The best way to reduce insurance costs is to keep track of your policies and see which ones you need for your business. In addition to that, when it comes to choosing insurance premiums, it is recommended to get several quotes from multiple insurance companies before deciding which insurance company would benefit you the most financially.

The cost-saving power of owner-operator trucking software 

It’s challenging to manage a small fleet or one truck. You serve as the accountant, dispatcher, compliance officer, and customer service representative in addition to being the driver. 

Owner operator trucking software can help reduce the workload and maximize profits in this situation. Here’s how operational costs can be strategically reduced with an intelligent, automated transportation management system (TMS).

Why adopt a TMS for trucking 

Many owner-operators believe that TMS software is only for large fleets with back offices and dispatch staff. However, the reality is that efficiency becomes increasingly important as your organization gets smaller. Your time is closely linked to your earnings whether you are operating alone or with a small team.

Imagine managing loads via text messages and phone calls, tracking spending in Excel, and following up on outstanding payments. This wastes your time and leaves space for unbilled mileage, late payments, and missing pickups. Real money is seeping between the cracks like that.

With a TMS like LoadStop, you get one platform that handles everything from dispatching and routing to invoicing and fuel tracking—so you can focus on driving, not admin work.

Automated transportation management system 

Manual duties, such as inputting delivery information, figuring out gasoline taxes, and sorting bills, may seem insignificant, but when you’re attempting to run loads back-to-back, they quickly add up. These tedious processes are eliminated via automation, which also reduces the possibility of mistakes.

For instance, consider IFTA reporting. LoadStop automatically logs your fuel purchases and distance, then creates accurate reports for you, saving you the trouble of remembering how many gallons you spent in each state (or worse, searching for faded gas station receipts). That saves hours and prevents penalties.

Or imagine this: Late on Friday night, you drop a load. The POD has already been uploaded and the invoice forwarded to your broker by the time you awaken on Saturday. Not only does that speed save you time, but it also expedites payment and maintains a healthy cash flow.

Best TMS features for owner operators

Bloated tools that you’ll never utilize are not included in the best TMS for trucking owner operators. It emphasizes the things that genuinely make your life easier and your business more successful.

You can control every aspect of your business from your phone using LoadStop. Sitting in your taxi at a rest stop, you may schedule loads, monitor shipments, scan and store papers, and even reconcile invoices.

Are you trying to figure out the optimal delivery route? To save you time and gasoline, LoadStop’s routing engine takes into account tolls, road conditions, and current fuel prices.

Every feature is made to save money, ease administrative burdens, and guarantee that you never pass up a chance to generate money.

How LoadStop lowers expenses for owner and operator trucking businesses 

LoadStop helps you run your trucking business more efficiently and successfully, but other technologies also aid in its management. LoadStop actively assists you in reducing your operating expenses, without adding complexity, from the time you reserve a load until you receive payment.

Real-time load matching 

You lose money every time your truck runs empty. However, when you are unable to see what loads are available in your area, deadhead miles are prevalent.

You may view available loads in real time with LoadStop according to your preferences and location. Imagine you just dropped a shipment in Atlanta, before you even finish unloading, LoadStop notifies you of a return load leaving within 50 miles, paying well and heading in your preferred direction.

Fuel management tools 

Your largest ongoing expense is fuel, and every penny you spend per gallon adds up. You may avoid costly stations and toll-heavy roads by using LoadStop’s real-time gasoline pricing data to plan your journeys.

Suppose, for instance, that you are transporting a shipment from Dallas to Phoenix. LoadStop gently reroutes you into a corridor with less tolls and cheaper gasoline rather than following the GPS’s default path. The whole difference? For that journey, you save $150 just on gas. If you multiply that by 40 similar hauls annually, you can save thousands of dollars.

Integrated invoicing and accounting 

It’s hard to chase payments, and it’s even worse when you miss out on tax deductions. All of your receipts, gasoline purchases, and expenses are arranged for simple reporting with LoadStop, and billing is done automatically.

Imagine not having to wait or chase down paperwork after completing a load because the invoice will be issued automatically with the POD already attached. Additionally, you download a clean financial report that your accountant will enjoy at the end of the year rather than going through old receipts and bank statements.

It’s not just practical; by avoiding underbilling and optimizing tax deductions, it actually saves money.

Maintenance alerts

A sudden malfunction might cost you the week’s earnings or, worse, cause you to fall behind on your loan payments. For this reason, LoadStop comes with personalized alarms and maintenance tracking.

Reminders are sent to you according to service intervals, engine hours, or mileage. Suppose you have 500 miles till your oil change is due. LoadStop notifies you to arrange servicing in advance, preventing downtime and expensive repair fees, rather than forgetting and running the danger of an engine problem.

This predictive maintenance strategy can help your truck last longer and prevent hundreds of dollars in unplanned repairs over time.

Insurance document management 

You never want to find yourself having to search through your glove box or contact your broker to obtain your insurance documents when a shipper or cop requests them.

All of your paperwork, including permits, cargo insurance, and COIs, are digitally stored and available from any device when you use LoadStop. If a certificate is required by a shipper? It takes less than a minute to transmit from your phone. if you are stopped? Everything is prepared for use.

It gives you peace of mind and enhances your professional appearance in all interactions.

Why LoadStop is among best TMS for truckers 

Software isn’t enough, whether you’re managing a small team or even a one-man operation. A business partner who is aware of the challenges and objectives of owner-operated trucking is essential.

LoadStop provides you with the automation, visibility, and control you need to reduce wasteful spending and boost your bottom line, without adding more work to your day, whether you’re operating a small fleet or a single vehicle. It is your integrated operations manager, cost controller, and compliance partner in addition to being a TMS.

Real drivers were the focus of LoadStop’s development. Each feature is intended to help you manage your business more efficiently, save money, and save time. LoadStop your co-driver who never takes a day off, from scheduling your next load to submitting your taxes. With it’s advanced features for carriers and brokers, you have the opportunity to optimize routes, properly plan driver’s schedule to not let them overwork.