Cutting truck fleet costs as much as possible while still completing deliveries with maximum efficiency is crucial in running any profitable trucking business. Trucking companies operate on a very thin margin of error.
In order to run any business effectively, you can estimate the upcoming chances of profit and loss in your business. With the help of using Margin of error calculator, you can be able to figure out the MOE survey by adding the sample of firm’s proportion, size, and desire confidence level. You simply need add details in margin of error calculator to select the level of confidence by clicking the drop-down menu, add the sample of firm’s population, and click on calculate to evaluate the output.
With the almost unpredictable fuel costs, maintenance and repair expenses, insurance premiums as well as the never-ending need for equipment, blowing up a trucking business’ income is very easy.
If you are wondering where to start looking in order to reduce your trucking business’ costs, the following tips can help get you started.
1. Make a Budget and Stick to It
Coming up with a trucking budget is any trucker’s biggest asset when trying to save more money on the road. While it may take some work at the beginning to get the budget started – like estimating how much money would be spent weekly, monthly, etc. it makes work way easier and leaves you in the clear when it’s done.
When you fail to budget you might find it hard to keep on top of things such as loan repayments. Also, not physically seeing how or where you spend your money makes it a lot more difficult to keep track of how you are spending.
2. Outsource Certain Services and Tasks
If you are running a smaller trucking company and especially a smaller one, sticking to your core competence and not letting your business get too spread out is very important. It’s understandable that giving up control for certain aspects is very hard for any business person, however, when it comes to some particular tasks, other people can just do it better. For example, a lot of trucking companies use invoice factoring to handle their collection services and back-office while at the same time getting needed financing.
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3. While Insourcing Others
You don’t have to go overboard with outsourcing. If you feel like you are outsourcing so many tasks, just take a look at what resources you have that can accomplish tasks you were previously outsourcing. For instance, tasks such as lead generation can be simply done under your roof.
Such services, when outsourced and done improperly, can be costly and not bring the right type of lead. However, you should note that much of this will require diligence and even training on your part to ensure that both you and your employees are capable and equipped to handle these tasks.
4. Enhance Fuel-Efficiency Efforts
Studies have shown that trucking companies spend more money on fuel compared to any other area of expenses. This also shows that with proper fuel-efficiency measures, many companies could significantly cut their fuel costs.
There are a lot of steps you can take as a trucking business owner, and most of them are essentially a matter of proper training for your team. Ensure that your drivers understand why efficiency is important by stressing on proper acceleration rates, tire pressure, and idling times.
Also, go over your routes to find out whether there is a chance for organizing a more efficient route and use a trained professional to conduct vehicle inspections to see whether there are cost-saving opportunities in these routes.
5. Plan Routes Wisely
Planning out the most efficient routes to each destination can save the trucking companies significant sums of money. Many times, companies just dispatch trucks only along main routes to specified delivery locations. But sometimes, alternate routes may be shorter as well as have fewer stops; however, most fleet managers normally don’t have these routes on their radar.
Planning routes wisely that are fast has many benefits including conservation of fuel, reduced engine wear, faster completion of deliveries, reduced gas emissions, less traffic which translates to reduced risks of accidents as well as less idling due to fewer stops. Also, with the availability of the various routing apps, routing efficiency is easier to achieve now more than ever.
6. Reduce Costly Idling Time
Idling is one of the most wasteful driver habits that is often overlooked. Idling consumes both engine power and fuel even though the vehicle isn’t moving and both of these can eat into a company’s profit margins. While idling can be impossible to avoid sometimes, like when the truck is stopped at an intersection or when stuck in traffic, other times there is no reason to leave a truck idling. But if the driver must stop once in a while whether in a parking lot or off the road, they should always cut off the engine.
7. Establish Safety Protocols
It is not unusual to find smaller carriers who assume that injuries are just part of the trucking business. This is a very dangerous assumption since it leaves a lot of companies vulnerable to worker’s compensation claims. Therefore, it is very important for every trucking company, no matter the size, to adopt a zero-tolerance policy towards injuries and accidents. This means that they should try every possible course of action to maximize safety along every stage of operation.
You can have your drivers go through training in skills like injury prevention, vehicle inspection, accident reporting, driver safety and more. Controlling operational costs of any trucking business requires optimal routing as well as competent handling of every task associated with human resources, billing, and cheap commercial truck insurance.