As a business owner, you must always be aware of every cost in your trucking operation. But cutting costs and expenses too deeply is something you need to consider when it comes to the success of your trucking operation.
The days of being able to pull your trucks under a convenient tree and work on them in the shade are long gone. And unless you understand the myriad computer and electronic components that make up a modern-day engine, you’re only going to end up costing your carrier more money in the long run. It’s best to find a certified diesel mechanic, one who continues his or her education on a regular basis, and stick with their repair shop. If you want, you can do the small stuff, e.g., change wiper blades and refill fluids; however, every penny you pay your trusted mechanics will be returned in less downtime, far fewer breakdowns, and certainly less aggravation for you.
What’s Worth What?
Being ‘penny wise and pound foolish’ certainly applies in trucking. For instance, do your trucks need major overhauls to meet the extremely strict California clean air regulations now on the law books, and should you take on that expense in the first place? If at least 75% of your regular tonnage is based in or going to California, then, yes, you’re going to have to buy new trucks or do maximum upgrades on your existing fleet. But if California freight makes up a small percentage of your usual loads, then why even consider the cost of doing business there?
If you don’t have five or more well-paying, consistent lanes to service year-round, your time is far better spent finding new loads or improving the lanes you now have. Buying a data base can be a good investment.
When it comes to improving the lanes now in existence, do you have your drivers strategically placed at each end of your regular lanes? They need to be spending their waiting-for-a-load time at home, not at an OTR or in a truckstop somewhere. Their families will be happier, your drivers will be happier, and the faster and more thoroughly you cover each turn of every lane, the more profit your carrier can generate.
Too many smaller trucking companies look to their local area for driving talent; however, chances are your bread-and-butter shipping customers are also located in the same nearby area. So the majority of your outbound freight is from these shippers. And chances are when one of your drivers rolls in, you already have a load ready to send him back out.
The problem? This driver just spent his most recent downtime waiting for an inbound load at a truckstop near the receiver for his last outbound load. When he gets home, you’ll need him under a load as soon as possible. Most truckers will leave a company if they don’t receive what they feel is adequate home time.
The solution? Hire drivers in places where you deliver your outbound loads. A driver will be sitting at home enjoying time with the family instead of sitting and waiting at a truckstop while you find a good-paying return load. You can solve your driver retention problem and significantly cut the cost of replacing drivers.
What about office personnel? If you need to let people go, why not consider hiring recent high school graduates to fill in the gaps? Filing, answering the phone, and printing out letters and attachments for you to sign can all be done by someone just starting out in the work world. How about someone who’s retired but needs some paid hours to help out with the bills?
The last person you want to let go is a driver, so look at multiple ways to retain him/her. Is there a lucrative lane you’d like to set up, but you’d need a team to really make it pay? Would your driver consider a driving team? Or are you in a metropolitan area that needs regular deliveries in congested areas that are difficult for a semi to get into?
Do you have a straight truck that’s usually sitting on the lot that could be used too? Would your driver consider becoming a trainer so you could take on another two or three ‘newbies’ and give them the training that only years of experience can impart? Or add him or her as a top-notch dispatcher? Someone who knows about the tricky little turn at that factory in New Jersey or that there’s another route to the delivery dock in Omaha around the bridge that ices over at 33 deg. every winter.
Sales staff, of course, is supposed to be impervious to economic downturns and sluggish cash flow. But if you’ve got a salesperson who isn’t busy enough or is having difficulty finding prospects, split that sales job in two. Make it a sales and marketing/public relations position. Have the salesperson come into the office for half a day and work on getting more attention on social media and making cold calls by phone or email. The other half of the day can be spent out in the field, talking to potential shippers and going to business events.
Send that person to all local Chamber of Commerce events as well as trade shows, conventions, and even sports tournaments if there’s a chance to talk to people. Any small-business person could become a shipper in the future, and ‘big business’ people are also constantly looking for ways to get their products delivered faster and with less damage and better tracking.
Watching costs and expenses will keep your carrier running many profitable miles, but don’t forget to step back and look at the overall picture as well. You don’t want to ‘save’ your small motor carrier into starvation.