Trucking Best Practices: The Dos and Don’ts of Successful Trucking Companies

What factors contribute to the success of a trucking company? Trucking can be a fantastic chance for those with an entrepreneurial spirit who want to be in charge of their own career and seize opportunities. However, it is frequently a low-margin, competitive business in which mistakes and bad luck can mean the difference between prospering and failing. Whether your company is new or established and growing, it is always necessary to focus on the fundamentals of your business and lay a solid foundation on which to build your chances of success. 

Here are a few fundamentals by San Diego trucking companies to examine and practice that might provide a trucking company with a competitive advantage: 

DO: BE AWARE OF YOUR OPERATING COSTS 

A trucking firm should be aware of its “all-in-cost per mile,” which is the sum of the company’s fixed and variable costs. A corporation cannot accurately anticipate its profit margin unless it calculates its all-in-cost per mile. Regardless of the number of miles driven, fixed costs often remain constant. Payroll, equipment payments, car registrations, insurance subscriptions, and operating authorities or licences are examples of fixed costs. Variable prices, on the other hand, will fluctuate based on the number of miles travelled. Fuel and maintenance are two common examples of variable expenditures. The sum of the fixed and variable costs determines the “all-in cost per mile.” You can calculate your profit by subtracting the “all-in-cost per mile” from the shipment rates. 

DO NOT FORGET LONG-TERM EXPENSES. 

A trucking company relies heavily on cash flow. Because operating cash expenses are frequent and recurring, it is easy to focus on these ever-present payrolls, fuel costs, and insurance premiums. However, successful trucking companies plan for the long haul as well. This begins with analysing the company’s operational costs, as detailed above, and then planning and saving for new equipment purchases, business expansion, and unforeseen maintenance needs. A corporation can also cut its capital costs via strategic finance, freeing up cash for additional business expenditures. 

DO: KEEP UP TO DATE ON THE RULES AND REGULATIONS 

Trucking firms must be cognizant of federal and state laws and regulations. Trucking companies must comply with a variety of requirements, including (a) obtaining interstate operating authority (an “MC Number”); (b) obtaining a U.S. Department of Transportation number; and (c) complying with federal and state fuel use taxes and vehicle licencing. A trucking firm will also be in charge of credentials like as IRP and IFTA. Furthermore, there are specialised laws and restrictions for moving certain types of freight. As a result, the trucking firm should do a thorough examination of the applicable federal and state laws to ensure that it has all of the appropriate operating authorization, safety standards and trainings, and the essential equipment to comply with any unique freight transporting restrictions. 

DO NOT: BASE YOUR ENTIRE BUSINESS ON LOAD BOARDS AND BROKERS. 

Load boards and brokers have a role in your company. When you have an empty truck, both can be really handy. When entering into these connections, it is critical to properly document them and understand each party’s terms, rates, obligations, and liabilities. However, these agreements can be quite costly because the broker or load board would retain anywhere from 10% to 20% of the load price. In the alternative, it would be prudent to cultivate direct ties with direct shippers and offer them attractive pricing. These agreements can produce consistent cash flows with higher profit margins over time. 

DO: MAKE AN INVESTMENT IN QUALIFIED DRIVERS. 

Everyone knows that good drivers are difficult to find and even more difficult to retain. Where most trucking businesses fail is in taking their drivers’ demands for granted. Truck drivers are no different than sales representatives, managers, and administrators. Truck drivers will propel the company ahead. A successful trucking company solicits driver feedback and then acts on it, whether by experimenting with alternative remuneration methods, giving benefits, or developing performance incentives. 

DON’T: SAVE MONEY ON EQUIPMENT. 

It is critical in trucking to have the proper equipment for the type of freight you expect to move. The type, weight, and size of the equipment will all influence the type of task you can perform. It may be difficult to rationalize spending a considerable amount of money on a brand new truck or trailer at first, but investing in cheaper, used equipment with unknown maintenance histories may end up costing you more in the long run. 

Due to downtime, frequent maintenance might raise your costs and reduce your potential to earn cash. Any new or used piece of equipment should be thoroughly examined, including having it inspected by a trained mechanic and analysing its maintenance history. You should also avoid applying a “band-aid” approach to your equipment because it must be maintained in compliance with the Federal Motor Carrier Safety Administration’s Compliance, Safety, and Accountability (CSA) enforcement programme (FMCSA). Overall, an owner-operator should prioritise reliability and longevity, as well as equipment maintenance requirements.

The same software that helps improve load efficiency can also aid improve travel routes. The purpose is to choose the most fuel-efficient and time-efficient routes possible, even if they are not the shortest. Speed limits, traffic signals, normal traffic volumes in some regions, and other times when trucks are stopped should all be taken into account by businesses. 

Making continuous lists of notes pertaining to things like hazardous materials routes, preferred routes, and construction zones that are all need-to-know bits of information is one way trucking business companies may aid themselves when it comes to route planning.