As the owner of a trucking company, you are part of one of America’s largest industries. More than 3 million trucks, 3 million drivers, and 1 million companies move more than 9 billion tons of freight on average annually. In fact, the American trucking Association regards the industry as the “lifeblood of the US economy.”
However, this economic pillar is beginning to feel the weight of political and financial issues. Small trucking companies often have the most hurdles to overcome, as they are constantly hindered by lower resources, small budgets, and the threat of being undermined by larger companies. This begs the question of how to improve profit margins in the tumultuous political and financial environment of America in 2018. To learn more, we turned to the experts at US freight factoring company Accutrac Capital, whose insightful blog posts offer up a number of tips for truckers to be more profitable in 2018:
The first step is budgeting well, which means first finding out where you are losing money before you can reduce costs. Analysing your fixed expenses (such as insurance, equipment, rent, taxes, permits) and variable expenses (tires, fuel, stationery, lodging, and meals) will help you locate areas in your business that need to be improved. Conducting a profit and loss analysis monthly or even weekly helps you reign in any stray numbers. Hiring a local accountant or using inexpensive accounting software can often help you budget your expenses accordingly.
Trucking companies of any size need to remember to concentrate on what they do best and outsource the rest. While subcontracting can cost money in the short term, the return on investments (ROI) reduce stress, enhance efficiency, and make day-to-day operations run smoother.
On the other side of the coin, any trucking company owner worth their salt knows when not to outsource. Generally, tasks that require direct contact with customers should be conducted in house (like customer satisfaction analysis or lead generation). This allows you to not only understand how your customers perceive your company, but will also better allow you to control your brand’s messaging.
Fuel expenses can make up 35% or more of the trucking companies overall operating budget. It is also a very challenging expense to predict, control, and monitor. Many factors synergize, and poor mechanics, adverse weather conditions, or other factors can impinge on your margins. This means that devoting time and money to aerodynamics and equipment maintenance are essential to fuel efficiency and reducing costs.
Fuel discount cards are also available for trucking companies who want to monitor expenses and reduce costs. Diesel fuel is a massive operating expense for most trucking companies, and fuel discount cards are an important consideration when rethinking your budget.
Fuel discount cards are often part of larger financing programs, and provide more than simple discounts on the costs of diesel. With the right financing partner, you can save on fuel, monitor your expenses, produce fuel consumption reports and IFTA reporting information, which often helps a tax time.
A fuel discount card program provided by a financing partner such as Accutrac Capital will allow you to:
- Track and predict cash flow
- Analyze your drivers’ purchasing trends
- Easily calculate fuel taxes using transactional and reporting data
- Control daily expenses
- Protect against unauthorized or unnecessary expenses
Control systems are an important part of keeping you in control of your company, and fuel discount cards become an invaluable accounting tool because of the comprehensive and convenient reporting that they offer. If you’re looking to improve your margins, follow the training tips listed above to keep your trucking company rolling in 2018 and beyond.