[This article was written by Lizzie Weakley.]
Owning or managing a transportation business can be increasingly complex. It’s one thing to have to manage employees from an office. It’s another thing entirely to manage employees that drive a truck worth six figures with thousands of dollars more in cargo onboard as they drive across the country. Costly mistakes made in the transportation industry can quickly wipe out any profit made. Still, there are ways to save money and stay profitable without harming quality.
Eliminate Debt with Freight Factoring
One of the most complex parts of the transportation business is getting paid for services rendered. Even after the goods have been delivered, it can be up to four months before a client pays. This forces many trucking businesses to live on credit. Credit means paying interest on debt. One way to eliminate this cost is by using freight factoring. This transfers that debt to a third party in exchange for the payment you’re owed.
Perform Truck Maintenance on Schedule
As previously mentioned, a big rig will cost over $100,000. They, in fact, often cost much more than that. As such, a truck is a huge investment. If you want to protect that investment, you absolutely must ensure that routine maintenance is performed on your fleet on schedule. Doing so will help shave future repair costs and allow you to use your trucks for much longer. It will save a lot of money.
Combine Your Deliveries
If there is empty space in your trucks as they roll out to make deliveries, you are missing out on potential income. Overall, you should try to create a system of combining deliveries. Making a single delivery with a single truck is wasteful in some sense. Adding more cargo onto that truck for multiple clients will increase efficiency and slash costs. If you don’t have enough orders to fill up your trucks, certainly try to find more. You should be maximizing your profit potential.
Make Safety a Priority
One of the top priorities for any transportation company should be safety on the road. This isn’t only an ethical concern either. Accidents on the road can ruin cargo and destroy your investment into your trucks. Make sure all employees drive safely. Include safety training in your job requirements. Perform safety inspection audits often.
The transportation business is a complicated business. It can be hard to make money and stay profitable for the long term. Thankfully, there are ways you can slash costs while maintaining quality for your clients. Doing so will help you remain solvent and profitable for the long term.
Lizzie Weakley is a freelance writer from Columbus, Ohio. In her free time, she enjoys the outdoors and walks in the park with her three-year-old husky, Snowball.