When it comes to running a small or medium-sized trucking company, there are plenty of challenges to contend with. But perhaps the most pressing challenge is fleet expenses. From fleet tires to driver salaries and everything in between, these expenses can quickly add up. It’s important then to find clever ways to reduce your operating costs without skipping out on the most important costs like maintenance and drivers.
With our background in the trucking industry, we understand the challenges your company faces. That’s why we’ve put together this quick list of seven ways you can reduce your operating costs while still maintaining a quality fleet.
1. Build an Effective Budget
One of the easiest ways to reduce your operating costs is to simply start tracking where your money is being spent. You should be creating profit and loss statements every month in addition to your budget. With these two sets of information, you’ll be able to track your expenses more accurately, which gives you more opportunities to eliminate unnecessary costs.
2. Consider Limiting the Size of Your Fleet
This may not be a viable option for all companies, but is an immediate way to lower your costs. On average, the total cost of ownership for a light-duty truck runs from $5,000 to $8,000 per vehicle annually. Even reducing your fleet numbers by just a few trucks can radically improve your operating costs. Of course, you’ll likely notice an increase in maintenance costs on your remaining fleet vehicles due to the increased amount of work they’ll experience. That said, most companies find that smaller fleets are more manageable and more cost-effective.
3. Make Proactive Maintenance a Priority
A damaged or broken truck is a costly one. Not only are you looking at the expenses of repairing the truck, but you’re also losing out on potential money you could have been making had the truck been operational. After all, it’s not uncommon for repairs to take days or even weeks in some cases. Proactive and regular maintenance may seem like a large recurring cost but consider an investment strategy. The more frequently your trucks are maintained, the less likely they are to break down. This means you and your drivers can spend more time on the road and less time in the shop.
4. Optimize the Number of Miles Traveled
This can be a tricky thing to control, but there are simple ways to reduce the mileage on your truck fleet. The first is to make use of
modern GPS and tracking technology. With improved route setting and finding, drivers can take the shortest route between points. You can also set up geofencing areas. These areas activate when the driver’s GPS enters the area and record how long the driver is there and where they travel while within the geofence.
5. Minimize Your Tire Expenses
Replacing tires is an unavoidable part of running a trucking company. But by purchasing and maintaining your tires, you can extend their lifecycle while enjoying the added benefit of reduced fuel costs.
You should expect to start retreading your tires. By retreading your existing radial-ply tire casings, you can get another 120,000 miles out of the tire. Checking the alignment of your tires can prevent undue wear and tear on your tires. Similarly, checking the balance of the tires keeps vibrations from wearing out the tires on your trucks. Over and underinflation of your tires can make them less fuel-efficient and wears them out faster, so ensure that your tires are filled to factory specs. These simple processes can save you thousands on tire costs every year.
6. Work with Your Drivers
In addition to the wages your drivers are paid, they can add to your operating costs with their actions and behaviors. By training them to drive efficiently, you can quickly reduce your fuel expenditures. For instance, teach them to run their trucks at the most fuel-efficient engine speeds. Don’t let them warm up the engine for more than 10 minutes, and encourage them to avoid revving the engines when warming the engine. Idling can wear out an engine faster than many drivers realize and can wreak havoc on your miles per gallon averages. It’s estimated that idling a truck for just 30 minutes after a 100-mile trip can cut your MPG by a third.
7. Make Use of Freight Factoring
Freight factoring is a great way to keep your fleet busy and paid. Factoring allows you to take on more loads from newer customers, establishing lasting business partnerships. Once you have delivered these loads, you’ll get paid the same day, meaning you can address or cover expenses faster. Working with a freight factoring service also can reduce the amount of work you’re doing at the office. When you let the freight factoring service handle your invoices, you can focus on fleet management instead. You can trust the service to send bills and process payments.
Trust Us for Freight Factoring
Reducing your operating costs is one thing, but increasing your payments and number of jobs is a better way of dealing with your finances. At Financial Carrier Services, we’re committed to offering your trucking company fast, fair, and flexible service. We offer competitively low rates, get you paid quickly, and can work with you on your terms. Find out more about our freight factoring services and contact us today!