When fuel prices are high and rates are low, trucking companies may need to find opportunities to cut costs to give profit margins a boost. Employing cost-saving strategies requires balance, so that operations remain efficient while savings are accrued. In this article, we’ll cover some strategies that can help trucking companies reduce expenses, even during trying financial times.
11 Tips for Reducing Costs for Trucking Companies
Reduce Idling Time
Idling uses fuel unnecessarily, so reducing idling time is a great way to cut fuel costs without sacrificing efficiency. Instruct drivers how to reduce idling time by employing strategies like not warming up the truck for more than 10 minutes and turning off the truck whenever possible while parked.
Cut Down Deadhead and Empty Miles by Planning Loads Out
Empty and deadhead miles don’t pay, so reduce them by planning backhauls or the next load in close geographic proximity to the last load. This is obviously a good practice regardless of a company’s financial situation, but by making a concentrated effort to plan, especially on loads where a lot of deadhead or empty miles are likely, can go a long way towards reducing running costs in tough times.
Utilizing data tools that can help you identify the best lanes to reduce deadhead miles, can be key in a tough environment.Express Freight Finance offers a free tool to their clients called MarketFIT that gives carriers near real-time market insights and intelligence so that they can make data-driven decisions to help reduce deadhead miles, as well as finding loads and negotiating more effectively.
Use Fuel-Optimized Routes
Not all routes are created equal in terms of both time and fuel efficiency. Utilizing route optimization software that takes into account not only whether routes are truck-friendly and short, but also fuel efficient, can help cut down on fuel use and therefore overall fuel costs.
Get Smart with Your Insurance Policies
Insurance is a great place to start looking for savings, and there are several ways trucking companies can cut down on insurance costs. Some of those might include:
- Bundling insurance policies
- Getting quotes from other companies
- Ensuring policies are what the company really needs
Express Freight Finance partners with companies that offer both cargo and auto insurance policies to cover freight of all kinds. Reach out our team by calling (877) 697-0605 to get connected with our insurance partners to find the right policies for your business.
Use Fuel Cards
Fuel cards make it convenient for drivers to get the fuel they need, but they offer other incentives, as well. They may offer direct savings on fuel, rewards programs, or savings on things like equipment or other necessary expenses for trucking companies. Express Freight Finance’s fuel card program does all of that and more, including offering discounts at every fueling location to allow carriers to avoid strenuous route planning based on fueling locations so that they can maximize savings.
Stay Up to Date on Maintenance
Truck maintenance can be expensive, but failing to complete maintenance on an appropriate schedule can be far more costly in terms of larger repairs, downtime, or even the need to purchase new equipment. Regular maintenance saves money in the long run!
Outsource Where It Makes Sense
In the modern transportation industry, trucking companies can outsource just about any task you can think of. Find the right balance between outsourcing and completing tasks internally to offer the best savings possible. Things like accounting may be more efficiently carried out by a third party, allowing company employees to focus on tasks that are part of core business functions. Utilizing a freight factoring service like Express Freight Finance is a simple way for carriers to outsource accounting, saving time by passing off collections tasks and getting you paid quicker so you can focus on the important parts of running your business.
Consider Implementing Safety Programs
Safety programs can not only help reduce costs by reducing accidents and all the expenses associated with them (repairs, deductibles, fines) but may also help to reduce insurance costs. Think about how to implement a cost-effective safety program that can help your company balance costs and savings.
Don’t Be Afraid to Negotiate
Never underestimate the power of negotiation. Trucking companies can negotiate with suppliers, service providers, insurance companies, and shippers to reduce costs and increase the amount of money coming in. Thoughtful negotiation may be able to save trucking companies money on things like fuel costs, maintenance, and equipment purchases. Using Data Tools like MarketFIT can provide information on the latest rates by truck type and lane, giving carriers negotiation power.
Implement Fuel Efficiency Incentives
Once drivers have been informed of the ways that they can save fuel, it might be a good idea to implement fuel efficiency incentives to give them a reason to use the tips they’ve learned to cut fuel consumption. It’s important to remember that these types of programs don’t have to be costly to be effective.
Use Technology to Your Advantage
By employing the right technology, trucking companies can boost savings in several ways. First off, by streamlining operations through improved workflows and automation, companies can save time and therefore labor costs. Second, software programs that optimize operations (e.g., route planning, maintenance software) can help reduce running costs and labor costs. Lastly, in-built reporting features can help trucking companies track their progress and adjust strategy appropriately to reach cost savings goals. However, software typically costs money; make sure that the proposed solution can offer your company ROI.
Even when the market may not be in the favor of trucking companies, implementing these strategies can help cut inefficient costs and help carriers come out ahead of hard times. Whether a company uses a few or all of the tips mentioned, it will help maintain a competitive edge and create advantages for the future by following these cost-saving practices.