How to Maximize
Profitability in the Trucking Industry
The trucking
industry is imperative to the United States shipping supply chain. Projections
estimate that by 2014, 14 billion tons of freight will be transported annually
by truckers in the United States. As fuel and operational expenses rise, it is
important for trucking business owners to plan their daily operations to allow the business to profit and
remain viable over the long term. With the assistance of technology and
planning, trucking businesses can maximize their profits and continue to move
America.
1. Calculate
the break-even cost for each load that you haul by figuring out the cost of
fuel, labor and a portion of your business's fixed expenses. To establish your
fixed expenses, include costs like monthly truck payments, insurance, licenses,
taxes and office expenses. Divide this amount by the number of loads you plan
to haul each month to determine the amount of fixed expenses to charge with
each load.
2. Provide
customers and brokers with a realistic price estimate for each load. Ask as
many questions about the load as possible when discussing potential contracts
with a customer and use this information to give an estimate that covers your
break-even costs as well as your desired percentage of profit. Plan loads so
you can profit hauling to and from your destination. Consider the costs
associated with returning to your business base with an empty truck if you are
not able to arrange a return load, and include these costs in your price.
3. Maintain
regulatory compliance by working with your employees to ensure that log books
are properly filled out, trucks are not overloaded and drivers are not working
longer than allowed by law. Tracking compliance will not only help keep drivers
safe--reducing the potential cost of accidents--but it will also help your business
avoid fines from regulatory agencies.
4. Use
fleet management software. Keep track of your fleet maintenance and work in one
location for easy reference, along with reminders to stay on top of regular oil
changes, tire rotations and more. By regularly maintaining your fleet, the
long-term cost of major repairs will be reduced.
Article by: Maria
Working happily with National Merchant
Services
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