The trucking industry is one of the most important parts of the freight business. Many millions of tons of freight are carried every year on the three million trucks that wind their way across the U.S. However, trying to run a trucking company isn’t without its pressures, there are rising costs and low freight prices to consider as well as the maintenance of the trucks. For a small trucking company, this can make things difficult, to the point where they need to cut costs.
Here are some easy ways you can make your trucking company run leaner.
Analyze Your Expenditure
Before you can think about cutting costs, you need to know where that money is going. There might be a lot of money being wasted that you can identify and try to save. Firstly, you need to think about your fixed outgoings. These are things like rentals, insurance, taxes and equipment. These things are not likely to change much so you can pretty much say that these are unavoidable. Other expenses are variables, these are things like fuel, tires, meals and lodging costs. These costs can be reduced if you find an efficient way to do them, though you still need to cover the basics. For example, you still need to buy tires when they need changing, or your vehicles won’t be legal. What you need to do is give this information to a local accountant or input it into accounting software and see if there are any ways you can save money.
One way that you can cut costs is to think about cheaper alternatives to the things you currently buy. For example, buying some cheaper priced tires or perhaps buying cheaper paper for the printers. Although you don’t want to be reducing things too far, they have to be cost-effective. You might be able to start renegotiating some of your contracts or giving them to other companies. If you are using a certain hotel for your drivers to stay in, then try to see if you can get a cheaper deal there or with another hotel. It might mean the rooms aren’t quite as nice, but it will help to cut the costs.
Find More Profitable Routes or Freight
One way you can generate income and save costs could be to look for more lucrative routes or freight. It might mean that your drivers will have to cover more miles, but you can weigh up the costs of this against overnight lodging and fuel. One way you might be able to save on fuel costs is to buy it where the cost is lower.If you add additional fuel tanks to your trucks, then they might be able to travel further and save money buying fuel where costs less. You can learn more about these tanks online.
If you are running a small business, then you won’t like the idea of separating your company. However, to keep your costs down, it might be a good idea to consider outsourcing certain functions. The best ones to separate could be recruitment, payroll, cleaning and maintenance, as they are not part of the core business. By outsourcing, you can also try to maintain the rest of the company without further cost-cutting exercises. It is important that the companies you are outsourcing to are going to provide the same level of cover as you were getting before, otherwise it won’t be a good saving.
Try Fuel Efficiencies
Probably your second largest expense is your fuel bill, it is a big part of what keeps your company going, but it can also be crippling if the prices rise too high. That is why it is vital that you try to teach your drivers to use fuel efficiently and to try not to waste unnecessary fuel. There are a few things that you can do to trim your fuel bill. Try to teach your drivers about not accelerating or decelerating too fast as this wastes fuel as does leaving the engine running while on a break. Tell them to limit the amount of time they spend warming up the truck unless they are in sub-zero temperatures of course. You should also be looking to give them the best and most cost-effective route. To achieve this, you might have to install GPS systems or plan using Google Maps. Another important part of the fuel issue is the deadlines, if the drivers are close to their deadline, they will speed up to make the time. Try to give them the time to make their deadline without having to go faster than is efficient.
The other area that needs new training is the management team. They need to be trained how to use the most cost-effective ways they can without compromising the safety of the drivers or the freight. There also needs to be more communication between managers and drivers so that potential problems can be ironed out before they get worse. It might be worth investing in some radios so that you can keep in contact with drivers as well as vehicle tracking so that you know where they are on the route. It will also allow you to adapt the route if you hear of any potential hazards or delays up ahead. It is also important that you are open to your worker’s opinions on the operation of the company. They shouldn’t be afraid to offer ideas or suggestions on how things are done. They may have valuable ideas that could save the company money or make it more efficient. If they are still unsure, then start an anonymous suggestion box where they can place their ideas.
Sometimes cost savings are inevitable, but, if you can do it wisely and efficiently, then it shouldn’t impact too much on the core areas of the business. You should also remember to keep costs low, but keep the safety high, this is one area you shouldn’t cut back.