Avoid the slowdown

Simple steps to help you survive times of less freight

Remember the movie Ground Hog Day? Bill Murray played a TV meteorologist who loathed his job, but got stuck repeating the same day over and over until he learned what his mistakes were and learned how not to repeat them.

So, you ask, what does this have to do with my trucking business? Well, we all have slumps in our lives, and the trucking business is not exempt. And a slump can be caused by many different things or events. 

A mid-winter slump is caused by too many weather-related delays that start taking a toll on both personnel and equipment. By the time we reach the month of February, we’re near the point of no return, wanting to just park everything until the ice and snow are gone.

The cyclic seasonal slump happens at different times of the year for individual hauling segments. Typically, package delivery peaks from October through early January. By the time February begins, it’s almost like someone pulled the revenue rug out from under you. 

The same can be said for hauling household goods, where peak months are May through September. For a mover, the month of January is tough. Most people don’t move during the cold and snowy winter months unless they absolutely must. However, the tow truck and recovery operation is extremely busy during those same winter months and again during the busy travel months of summer.

An unexpected slump is usually caused by outside influences. It could be a labor strike at a plant out of which you haul, or a customer changes owner­ship or management and the new people handling shipping have their own list of carriers they use—and you’re not on that list. It could also be a disaster such as a fire, flood or earthquake that damages or destroys the physical plant to which you ship or deliver loads. Business slumps can happen for any number of reasons. 

So, what do you need to do to get past the slump? For starters, try to identify the cause, then develop a strategy to reverse the effects. Most downturns are temporary and will eventually reverse themselves, but don’t just ignore them.

It’s all about maintaining your marketing focus and increasing your marketing efforts to find the needed freight. Every carrier needs to search constantly for new shippers even during the good times. You never know when that great customer you’ve depended on may make the dreaded “we no longer need your trucks” call. Having replacement shippers in the wings is crucial to maintaining your necessary revenue flow. Contact customers or shippers you’re currently doing business with to check if they have additional tonnage to be hauled. Triple your sales and freight search efforts. 

The seasonal slump is a yearly occurrence, so you need to look for a business opportunity that’s seasonal and utilizes your equipment and/or your employees. One heavy-haul company owner I know who is based in the snowbelt uses his drivers in the winter to operate snow-removal equipment. He contracts with shopping malls, schools, and manufacturing plants. And the owner of a gravel-hauling company with a fleet of dump trucks has equipped each of his 10-wheel dumps with a snowplow blade and salt spreaders. 

TRAINING & REPAIR
Use a seasonal downturn as an opportunity to do the major repairs and fixes to your equipment so it’s ready to go when business picks up again. It’s also a great time to review your business plan or train personnel. 

Now is the time to make the changes necessary to achieve business goals. Look at your cash flow and see how it can be improved. You can also step up sales efforts to ensure you have back-up shippers to protect against future slumps.

Whether it’s a seasonal, cyclic downturn or an unexpected slump, a successful method to increase freight-hauling sales is the tried-and-true promotional deal. It’s great for creating a quick source of revenue in a short time. But make sure the hauling rate you provide is no lower than your operation’s break-even point (which needs to include all expenses, including your salary).

Develop a special offer for existing shippers. Set a short time period for them to take advantage of the promotion so they must take immediate action or forfeit the right to the deal. Contact each prospect and make them aware of the special offer; let them know this is in appreciation of their continued use of your hauling services. 

Contact recent freight prospects and tell them of this special one-time offer and encourage them to take advantage of your quality freight hauling services.

Business downturns can be beneficial if handled correctly. They provide the time necessary to review past mistakes and adjust operations so they are not repeated. They give you the opportunity to try a new approach that may result in a more efficient way to operate. 
And for that mid-winter slump, I suggest planning to earn enough money during the previous 11 months so you can go to South Florida, or maybe even take the employees on a Caribbean Cruise in February. I know of a company owner who does this every year. His entire company is so fired up and ready to focus on the business for the next 11 months that their earnings exceed what they used to make in 12 months by more than enough to pay everyone’s salary, the fixed expenses of the company … and the cruise.

Happy Groundhog Day.

Contact Tim Brady at [email protected]­uptheroad.com or call 731-749-8567. Join Brady in the Trucking Business Community at www.truckersu.com.

TAGS: News
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