Strategies To Reduce the Trucking Cost for Your Fleet - Strong Tie Insurance Services

Strategies To Reduce the Trucking Cost for Your Fleet

Strong Tie Insurance November 21, 2019 Commercial Truck Insurance

If you’re looking to increase your trucking company’s profitability, your first thought might be cooking up strategies to generate more income. But the reality is that it’s actually harder to generate more revenue than it is to simply cut costs. However, significant expenses like commercial truck insurance and driver costs aren’t always the most productive areas to cut. In fact, reducing these costs could put your company at higher risk in the long run.

Consider these other strategies to reduce trucking costs for your fleet.

1. Keep Track

Before you start making decisions to cut expenses in different areas, take some time to understand where your money goes. Far too many companies operate without an actual budget. Instead, they guess at how many different elements cost the company. Other than having a basic profit and loss statement, the company doesn’t know their actual costs.

In an ideal world, you should know if your company is making money every single time you dispatch a truck, make a delivery, or transport goods. Make sure you are keeping track of inventory, including office supplies. Spend time logging money spent and money earned. If you’re not sure how to create a profit and loss statement, operating ratio, debt ratio, or budget, take some time to learn. There are many excellent accounting software tools, online videos, and classes that can help you keep better track of your numbers.

You might even consider working with an accountant for more than once a year. It might seem like an extra expense, but an experienced professional is trained to help find areas where your company is wasting money.

Until you actually know where the money is actually going, it’s hard to make the right decisions about making cuts. In some cases, such as with truck insurance, you may not be able to skimp. The first step to reducing costs is to be informed and keep track of your weak spots.

Read More: Costly Truck Insurance Mistakes To Avoid

2. Watch Fuel Costs

One of your highest costs in the trucking industry comes from fuel. Certainly, it’s not possible to cut fuel out of the equation, but there are some things you can do to ease the pain.

  • Track fuel consumption by vehicle and driver. You want to know how it adds up on a weekly, monthly, quarterly, and annual basis. This data helps understand what to expect in future fuel costs. You may also be able to identify inefficient vehicles that need serviced or find drivers who would benefit from additional training. 
  • Investigate rewards cards. Look for fuel perks and rewards programs that can be tracked online. Many of these programs offer discounts or points that can be used on other purchases. While the individual discounts may seem small, they can add up over time and with multiple drivers. 
  • Get gas at less expensive stations. Fuel prices can vary a decent amount from location to location, especially when traveling through cities and across state lines. There are some smartphone apps, websites, and communities that help track gas prices in different regions. Train your drivers to fill up while in the least expensive areas, even if your tank isn’t empty. 

3. Treat drivers like managers.

Your drivers make tons of decisions each day that impact your variable costs. Most drivers don’t realize that their actions and choices play a role in the overall wealth of the company. Think about your drivers as if they were general managers of their route and then train them accordingly. Help them understand how different decisions impact operational costs and incentivize them to work in the best interest of the company.

Proper training can also reduce costs involved in worker’s comp claims. Many hold an attitude that accidents and injuries are standard parts of the trucking business – which could set you up for comp claims, expensive lawsuits, and more. Make it your goal to have zero injuries on the job. Safety training and accident-avoidance incentives can make a significant impact on long-term spending.

Read More: How Workers Compensation Works in the Trucking Industry

When drivers are treated and trained as if they were part of management, they might have other ideas to help cut costs. Make sure that you create an environment where drivers feel comfortable sharing ideas. Instead of having a basic suggestion box, set up time for driver concerns to be heard in person. Since they are the ones out on the road, they may see things that you don’t. By empowering employees to help tackle the problem, you’re likely to get higher-quality ideas that may have never crossed your mind.

4. Utilize Technology

If your trucking company is using outdated technology, the idea of an upgrade might seem costly, if not overwhelming. There are definitely costs associated with upgrading to new technology, but the cost-saving potential is almost immeasurable. Using the available technology might also mean making cuts.

  • Toss the fax machine. Fax machines were once necessary, but are now inefficient and come with extra costs: toner, ink, paper, an additional phone line, space in the office, etc. With the availability of cloud-based technologies, mobile apps, and third-party systems, your company can get along without a physical fax machine. 
  • Reduce paperwork. You can save a great deal of time by using relevant technology to handle the paperwork. Mobile apps can scan and send load and delivery paperwork instantly. Reducing paperwork means spending less on office supplies, saving time on regular tasks, and getting paid faster. Saving time means your staff can focus on other tasks geared toward improving your business.
  • Track loads. New technologies allow you to keep track of where goods are in the transit process. The shipper may require the ability to track. It also allows you to track your drivers, routes, mileage, time, and more. Having this information can make a significant impact on future decisions. Tracking technology will also make you more attractive to customers, increasing revenue in the long run.

5. Maintain your vehicles – and your drivers

Take care of both your fleet and your drivers. Your trucks should be serviced regularly. Take the time to inspect your vehicles, and make the necessary repairs. A minor issue can cause a massive problem down the road.

The same is true for your drivers. A sick driver is much like a broken-down truck that doesn’t help your bottom line. Encourage your drivers to eat healthy, exercise, and to maintain proper mental health. If you can, tie them up with resources This kind of care can go a long way to reducing employee turnover and needing to repair parts of your fleet.

Thinking of expanding your fleet? Our blog post dives into 3 crucial considerations before expanding your fleet. Gain insights that align with cost-saving strategies for your trucking fleet.

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