9 Tips to Control Expenses in Your Trucking Business
Running any kind of business is expensive. Being an owner-operator and running a trucking business is REALLY expensive! The cost of a truck – much less multiple trucks – is an enormous expense. When you add in unpredictable things like fuel, rates, the market, weather, etc. – it’s no wonder it takes a focused mind to drive a truck.
If you’re running your own trucking business and looking to cut and control some expenses, these 9 tips will help.
1. Use a TMS.
A good transportation management system (TMS) will help you manage loads, simplify payroll, and automate IFTA reporting. It should also let you create invoices and BOLs, as well as provide detailed reporting and statistics on your business. A TMS will cut the amount of time you spend on office tasks and save you money. Although it might seem counterintuitive to save money by spending money on a TMS, Truckstop ITS Dispatch user actually see an average of 12% more profit.
2. Figure out your cost per mile.
Knowing how much you’re spending per mile to keep a truck on the road is the single most important number you can know for your business. Yet, most owner-operators don’t take the time to figure this out. If you don’t know how much you’re spending, you don’t know where you can cut costs. Take the time to track your trucks for a while; it’ll be worth it.
3. Track your budget each month.
You’re going to have to keep track of all incoming and outgoing dollars to figure out your costs per mile. Take a look at all of the expenses and see if there’s anywhere you can make cuts.
Look for things you’re no longer using like monthly and annual subscription services. Work with an accountant for a profit-and-loss (P&L) statement at the end of quarter and looks for trends in spending. A lot of times it’s more profitable to cut costs as opposed to increasing earnings so keep that in mind when weeding through expenses.
4. Protect your cargo.
Cargo theft is one of the most expensive crimes there is in the U.S., and it continues to be a real and present danger around the country. Thieves are always figuring out new and brazen ways to steal trailers and cargo. It’s best to educate yourself and your drivers about the best ways to protect freight, as well as to be aware of how truckers can be targeted by thieves.
5. Implement fuel-cutting strategies.
You can always limit the amount of time spent idling, but there are actually a number of ways to cut fuel costs that you may not know about. From keeping tires at the right pressure to adding a roof fairing, make sure you’re using strategies to cut fuel costs, and educate your drivers so they’re doing the same.
6. Plan routes and stops ahead of time.
You can’t prepare for everything, but taking a look at the weather, road and construction delays, shortcuts, toll booths, bridges, truck parking, and road limitations will all help make for a smooth trip. It will take a bit of time beforehand and seem like a pain, but researching the most efficient routes will save time in the long run.
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7. Watch your insurance costs.
Trucking insurance is very expensive, and the cost to an owner-operator with authority can vary widely – to a difference of thousands of dollars a year! Get a few different quotes from insurance agents before deciding on which company is right for you and your business, and don’t be afraid to do this every year. You should also maintain a high credit score, keep track of the FMCSA’s SAFER scores, and make sure your drivers all have good driving records to retain a good insurance rate.
8. Don’t wait for a problem.
Maintenance on a truck is critical for its long-term use. Plus, it can identify small fixes before they become expensive disasters. That means checking the oil before every load, making sure the tires are in good shape and maintaining the right pressure, and watching fluid levels (especially the radiator!) when you’re on the road.
9. Be a mentor for your drivers.
If you want your drivers to have good habits, you need to exhibit them yourself. If you’re not just running your own trucking company but you’re also driving, you need to adhere to the same things you expect of your drivers. Always do pre-trip checks of your truck, use fuel-cutting methods, and practice safety. Additionally, help keep your drivers up to date on regulations, talk them through the hassles of trucking (parking issues, nightmare loading docks, etc.) and share your extensive knowledge of the transportation industry to help them be successful. It will save you money in the long run.
Implementing the right systems and spending your time where it really matters can make all the difference in your trucking business. To learn more about how Truckstop can help you develop and grow your company, schedule a demo.