9 Tips to Control Expenses in Your Trucking Business
Being a successful owner-operator and running a trucking business can be expensive. The cost of a truck—or multiple trucks—combined with changing fuel prices, load rates, insurance, and truck maintenance quickly cuts into your profitability. However, with the help of careful planning and technology, there are ways to create operational efficiencies that will help you control expenses in trucking and keep your business moving.
Here are nine ways to control trucking expenses as an owner-operator.
1. Use a TMS.
A good transportation management system (TMS) will help you manage loads, simplify payroll, and automate IFTA reporting. Investing in a TMS helps you stay organized and saves money by identifying performance gaps and areas of improvement, reducing the possibility of human error, and managing your bookkeeping in a centralized location. A TMS also lets you create invoices and BOLs, as well as provide detailed reporting and statistics on your business.
2. Determine your average monthly cost-per-mile.
Knowing your average cost-per-mile uncovers spending patterns and cost-saving opportunities, especially with fluctuating fuel costs.
Here’s how to calculate your monthly cost-per-mile:
Total monthly expenses (fixed costs + monthly variable costs + salary costs) ÷ your total number of miles = your monthly cost-per-mile
Use this information to get a comprehensive picture of your business expenses and where you can make adjustments.
3. Track your budget.
Breaking out your expenses helps you see where you can improve or cut expenses. Look for unnecessary spending like monthly and annual subscription services you no longer use. Work with an accountant for a profit-and-loss (P&L) statement at the end of the quarter to find trends and set expectations.
Knowing where every dollar goes gives you better awareness and will help you prepare for any unexpected expenses.
4. Protect your cargo.
Minimize your risk of falling victim and losing money by:
- Parking in secure locations
- Using dashcams and high-security locks
- Avoiding theft “hot spots” where there have been knowns issues
- Carefully vetting brokers and shippers
5. Take control of your fuel costs.
Fuel is one of the highest expenses for owner-operators. Finding ways to improve fuel efficiency can quickly put more money in your pocket.
Here are the top four ways to minimize your fuel costs:
- Consider your tires’ rolling resistance. Making an informed tire purchase reduces fuel consumption. Investing in higher-quality tires may cost more on the front end but will deliver longer life and better tread grip, giving you significant fuel economy gains.
- Watch your speed. Your fuel mileage decreases once your truck passes its optimal speed, which is around 60 mph. Exceeding this means you’re wasting fuel (and money). Even a slight decrease in your highway driving speed can significantly reduce your fuel consumption, and only adds a few minutes to your travel time.
- Find your engine’s “sweet spot.” The “sweet spot” is the most efficient revolutions per minute (RPM) to run your engine. If your engine is working harder to drive at a certain speed, you will burn more fuel. Every truck engine varies, but the lower the RPM, the less fuel your engine will consume.
- Get a fuel card. Fuel cards offer discounts at the pump. Take advantage of these savings. Many cards also have additional perks like partner discounts for hotels and truck accessories.
6. Plan your routes.
Once you book a load, make the most of every mile by planning your route and return plan. This helps eliminate deadheads and driving empty miles.
Be sure to consider the number of off- and on-ramps also. Your truck burns more fuel on an on-ramp as it works to get up to speed. Avoiding them to get to a fuel stop will increase your fuel mileage and decrease your expenses.
7. Watch your insurance costs.
Insurance is a requirement in the trucking industry. But there are ways to reduce your rates and still have comprehensive coverage.
Be sure to shop around for the best rates before making a decision. It’s also a good idea to do this annually since rates continue to change.
Another way to decrease insurance costs is managing your compliance, safety, accountability (CSA) score. Having a good driving record and safety habits can save you money when it comes to insurance premiums.
8. Be proactive with truck maintenance.
Mechanical failure without a safety net can take a major toll on your expenses or even put you out of business. Create a preventative maintenance plan (plus a rainy-day savings fund) to minimize repairs and keep your equipment in tip-top working order to prevent major breakdowns which turn into major expenses.
9. Maximize your time.
In trucking, time is money. The more time you spend on the road, the better. Finding tools to help you run your business more efficiently lets you focus on what really matters. Outsourcing tasks may seem like an extra expense, but you’ll gain savings, and lower stress, by using a load board and rate insight tools that give you necessary information faster.
Better business, more money, less worry
Having the right systems so you can spend your time where it really matters can make all the difference in your trucking business. Find high-paying loads, cut expenses, and get paid when you need it—at your fingertips with Truckstop Go™. Get started today.
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