Trucking businesses have played a key role in transforming the world into a global village, as we call it today. Transporting essential goods from one town, city, or state to another comes with its fair share of concerns.

As the owner-operator of a trucking business, you must look into several aspects of your company. These include budget, payroll, time management, customer satisfaction, and driver safety, among others. 

If such areas were challenging to manage when you started, the complexity will only grow as your business expands. Most trucking companies aim for a profit margin of at least 6% to 8% of the annual income per truck. 

To maintain this target even as your business grows, you need to follow certain best practices. Fret not; this article will discuss three (solid) practical management tips that will improve your company’s profitability, even in its transitional phases.

Invest in Digital Solutions

When your trucking business was lean and small, you perhaps had no considerable need for tech support. It would have been easy to manage the operations of a few trucks, along with preventive maintenance and other necessities.

Now, the scenario is different. With fleet expansion, not only you but even your internal team may struggle to stay on top of the affairs without tech adoption. If expenses are a concern, you can start with digital solutions that have the most potential for positive impact.

Take the example of trucking driver settlement software. Manual calculations are time-consuming and vulnerable to errors. A single inaccuracy will mean you must start the process from scratch. Plus, it will lead to unnecessary disputes.

The good news is that this process does not require the personalized human touch. Technology is perfectly capable of eliminating errors and accelerating the process. As you learn more here about driver settlement software, you will understand its key features better for maximized outcomes.

According to Toro TMS, these include customizable payment structures, automated payment calculations, fuel expense management, etc. If anything, your team stands a good chance of saving a couple of hours each week (which can be directed towards other business-critical tasks).

Besides payroll, you may invest in GPS fleet tracking devices for route planning. This technology will help you manage time effectively, identify the most productive drivers, and procure the real-time status of each vehicle in the fleet. 

You can offer customers reliable logistics details whilst ensuring their package reaches them on time.

Other digital solutions help with truck maintenance, road safety, cost reduction, and more. Choose technologies that will best suit your business’ current growing needs, and you can add more when required.

 

Have Open Conversations with Your Drivers

Your company’s greatest assets are those behind its fleet’s wheels. Since they spend their working lives on the roads, truck drivers’ feedback can play a critical role in success. Their insights can help you improve business operations.

Start by offering your truck drivers a meaningful way to share concerns and provide feedback. Conduct surveys or host sessions exclusively to discuss challenges and possible solutions. Let’s look at some common areas where driver feedback may apply –

  • Inefficiency – moving from point A to B is not without its share of hiccups. Though inclement weather conditions are not under your control, other areas like inefficient practices associated with vendors, traffic, etc., are. As the decision-maker, you may be detached from such internal issues.
  • Communication gap – because there can be a vast difference between what you conveyed and what a driver understood. Since recruitment, expectations for both parties must be crystal clear (especially now since you might need more headcount). Intermittently, conduct sessions to train, clarify doubts, and reiterate policies so that everyone is on the same page.
  • Poor working conditions – may take the form of overworking, poor healthcare, equipment deficits, and more. This not only wastes time but can lead to dangerous situations if not addressed at the earliest.

 

Keep a Plan in Place for Tough Times

It is rightfully said that those who fail to plan are automatically planning to fail. In general, the peak months for trucking companies run from August to October owing to heavy holiday retail shopping.

Besides the remaining lean months, there is an ongoing freight recession owing to a demand-supply imbalance. If this period clashes with your company’s growth, you might run out of cash reserves to maintain ground.

Be it the current purge or upcoming tough times, a successful trucking business prepares itself against market misfortunes. Listed below are some ways in which you can survive a slow market –

  • Start by analyzing your current cash flow. This will help you understand if and how much funds are available for lean periods.
  • From this time forward, set realistic revenue goals. Some companies in their growing stages try to expand too fast (like too many tech investments at once). Study your market, identify gaps, and recognize what looks achievable with the available resources.
  • You can optimize cash flow using freight factoring services. Many companies provide advances on certain invoices, discounts on truck maintenance or fuel, etc. This leads to cost savings.
  • During the good times, resist the urge to invest all profits on more equipment, and vehicles, or increase the headcount. A smarter way is to devote a portion of the profits to investments that can be easily liquidated.
  • Remember, there is safety in many counselors. Build a team of reliable advisors who know your industry well and can suggest actionable tips to manage risk. This team could include bankers, factoring companies, attorneys, etc.

 

Final Thoughts

If it is challenging to grow a trucking company, sustaining that growth will also require tremendous effort. Despite being analog and fragmented, the trucking industry is gradually moving from a buyer’s to a seller’s market. 

A huge part of retaining success is to get your finances in order. This means you must have a clear idea of your cost-per-mile, fuel expenses, cash flow, etc. The low barrier to entry makes the trucking industry ruthlessly competitive. 

There are nearly 1.86 million trucking companies in the US alone. If you wish to gain a competitive edge, walk the extra mile now!