The trucking business can be a lucrative field when it is managed correctly. No matter what parts of our lives end up converting to a digital format, there is no less need to be able to move things from place to place. You can’t email someone a package, after all.
Because it’s such an enduring enterprise, there is less worry in trucking about the availability of business. The challenge is to keep up with competitors and have a price structure and a cost structure that you can sustain. When you can strike the right balance in those areas, you can be successful in trucking.
Of course, that is true in any enterprise, but there are a few areas that are particularly challenging about trucking. In addition to having a superhero attitude toward business, companies must excel in these areas in order to get off to a profitable and sustainable start. Consider these three elements.
Getting Paid
Whether you’re an owner-operator trying to balance the books from the sleeper cab or a larger firm with a stationary office, it’s always difficult to get paid for your work in trucking. Many trucking companies have found that freight factoring is preferable to an endless cycle of bill mailing, late payments, and check cashing.
Factoring lets the company send the bill to the factoring company, who pays it immediately and then does the legwork of pursuing payment from the actual customer. A percentage is withheld from each invoice to pay the factoring company, but it only takes avoiding a few delinquent bills to make that pay for itself. The trucking company gets the money on time, every time, ensuring a predictable and adequate cash flow that will keep the financial plan on track.
Controlling Costs
There may be no other field with quite the level of variable costs that are present in trucking. Fuel, tires, maintenance, and fleet replacement are all directly tied to miles driven and some other elements.
All of those elements can be controlled. In addition to carefully planning routes to avoid construction and expected traffic jams, trucking companies can also reduce costs by mapping fuel prices and optimizing fill-up points. A 20-cent difference per gallon of diesel really adds up in the context of hundreds of gallons. They should also be vigilant to preventive maintenance and verify that all checks are completed so that breakdowns can be avoided. Drivers should be monitored to ensure that the truck doesn’t get grounded by law enforcement for weight issues or log book violations.
Handling Competition
Because trucking is a solid industry, there are plenty of other players out there. When a new company is starting out, it can be tough to get a market share.
The first thing to do is to take on the loads that other companies don’t want. It may be one that requires a brief dead-head that the company can handle when others can’t, or it may be one that involves tough city traffic or an unusual route. Whatever the complexities are, the companies that will take on the tough work will build a financial base that will permit them to be more selective in the future.
Companies can also create a niche for themselves by handling specialized or hazardous cargo. These jobs are often more expensive to undertake, but freight factoring can ensure that profitability is maintained.
The trucking business can be very competitive because there are only so many loads to go to so many points each day. Somewhere out there, though, some company is struggling to stay in business, and their market share is up for grabs for a company that has a better billing system, leaner cost structure, and a greater willingness to haul what others won’t. That is how trucking companies succeed.
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