You can’t develop a profitable hauling strategy if you don’t master the basics. Start by identifying the locations you want to service and the potential shippers in those areas. It’s imperative to know and understand the entire market area.
Who are the potential customers? What are they shipping? Where are they located? Where are the shipments going?
Imagine a target with the bull’s eye in the middle. You must focus your attention and learn about every bit of tonnage that you're capable of hauling that moves into and out of this region. This bull’s-eye becomes your home terminal. If you only have one or two trucks, a small niche area can provide you with more tonnage than you'll ever need.
However, you have to do your homework.
Learn the truck-to-load saturation in the area. The law of supply and demand will almost always determine the hauling rates. If there are more trucks in an area than loads available, the rate you receive will be low. And the opposite is true when tonnage outpaces truck availability. The plan is to develop a truck-to-load saturation (more loads) in your favor.
Now that you know your home terminal, you need to look where the available tonnage from your home terminal is going. This becomes the next ring out from your bull’s-eye, thus creating your niche area. Now repeat the procedure for every shipment.
Find out if there are loads returning to your home terminal from the destination points. What’s the truck-to-load saturation in these locations? It’s very important for you to become familiar with all the areas in which you plan to haul loads. Concentrate in as few areas as possible, but maximize the use of your equipment. This will give you a better opportunity to become the load expert for your niche area, creating a truck-to-load saturation that’s favorable to you.
Again, always focus on your bull’s-eye. When you start your outbound load, you must have your return load booked—always. The further out you can schedule loads, the more efficient your operation becomes and that adds up to more revenue.
This planning ahead doesn’t mean just knowing what you’re going to be hauling tomorrow or the next day. It’s a load strategy for the future. Just as a trucker should be driving beyond his truck's hood, when planning loads you should be looking to the horizon and beyond. Arrange with your shipping customers to have as many pre-planned, pre-routed loads mapped out as far in advance as possible. The further out you plan, the easier it is to know your costs, to know your projected revenue, and to fill the gaps that invariably are going to occur. By creating a load strategy, you'll be mapping your financial route to success.
Present yourself (and, by extension, your truck) as a “logistics expert.” If you walk, talk, and appear as a logistics expert, potential customers will see you as representing an entire shipping and hauling concept and not “just a truck.”
First impressions are always lasting impressions and the most difficult to overcome. You must become your company’s sales representative, so present yourself in the same manner that your best competition would. Order-takers sell price; sales representatives sell quality and service. Present yourself professionally, in the same manner as a larger trucking concern would, and you’ll be treated like one.
Deal directly with shipping customers or their logistics representative, and avoid double- and triple-dip loads (loads that have more than one broker involved). This doesn’t mean never work with load boards, but do it as seldom as possible.
Once you’ve landed shipping customers, your next objective is to be competitive in quality of service: Don’t try to compete with price. It’s easy to compete against someone with price. And there will always be someone out there willing to haul that load for less than you can. So why even try to compete on price?
If you provide top quality, go-out-of-your-way service, that “can do” approach makes it very difficult for someone trying to compete with a lower price to succeed in taking your customer. Think in terms of “raving fans,” not just satisfied customers. This will create a demand for your services and have shipping customers searching you out—and contributing to your objective: more loads than trucks.
Also, never look for a load at the last minute. This means you're desperate, and no matter how you try to hide it, they’ll know. The shipper, or worse, the broker, will lowball the rate. Constantly be on the hunt for new customers to create truck-to-load saturation in your favor.
If you do have to look for loads at the last minute, then you’ve failed in one of two areas:
- You’ve traveled out of your niche area into unknown territory. Don’t do this unless you’re getting a rate that pays enough to enable you to return empty to your niche area and still show a reasonable profit on the load (minimally you need to charge a roundtrip rate).
- You haven’t reached your truck-to-load saturation objective, and you need to be locating more customers.
The best way to ensure success is with a plan in which you know what loads you'll be hauling weeks in advance, not hours.
To contact Brady, go to www.timothybrady.com. For information on Trucking Business Courses, go to: www.truckersu.com