Useful tips on how to succeed in the world of trucking.
There can be little doubt that the trucking industry offers tremendous potential for profit, but the fact is that there is a great deal of competition within it as well. The key is to balance trucking know-how with business acumen, and fortunately, several useful tips can help anyone plant their flag in the world of trucking.
Know Your Operating Costs from Day One
A critical aspect of achieving success in trucking is to get a firm handle on your operating costs right from the start. Without this information, it is impossible to assess whether you have a path to profitability. Examples of fixed costs are things such as truck installment payments, insurance costs, necessary permits and licenses, and more.
Having a good feel for what your variable costs are likely to be is also essential to success. Fuel expenses are perhaps the highest such cost. The more miles you travel, the more you will spend on fuel. When variable costs are taken together with fixed costs, you will be able to gain a feel for your likely all-in per-mile cost, and this will permit you to set a rate that yields a profit.
Shop Around Before You Buy Equipment
An important part of getting a handle on fixed costs is knowing the right places to buy trucking equipment. Seeking the most competitive prices will help ensure profitability over time. Many trucking companies turn to websites like CharterTrucks.com, a site that lists many popular cab models including the Peterbilt 579 for sale.
Don’t Overpay for Fuel
Taking the time to learn about fuel-purchasing strategies is another important tool for achieving trucking industry success. Owner-operators spend a lot of resources on fuel, and those new to the field tend to overspend in this area. It is easy to squander lots of money unnecessarily because of a lack of understanding of how fuel taxes work. It is best to search for the lowest base fuel price, irrespective of the pump price because this considers the impact that taxes will have on the bottom line.
Don’t Sell Yourself Short
Savvy truck owners and operators understand the importance of charging an appropriate per-mile rate so that hitting a strong profit point is not only doable but likely. Prior to contacting shippers and making deals, it is vital that target rates already be determined. The key is to stay in a competitive position in relation to the rates charged by brokers.
Cut the Middleman
Another great strategy for success is to work without middlemen such as brokers and load boards and focus on dealing directly with shippers. Because brokers retain roughly 10 to 20 percent of load prices, using them can really eat profits quickly. By building your own list of shippers with sufficient volume and charging a competitive rate, you can hang on to every dollar of profit instead of having to split it with other parties.
Run a Tight Ship
An often-overlooked yet still important element of trucking industry success is to keep the back-office operation running as smoothly as possible. This is especially true once you begin adding drivers to your enterprise. You may decide to handle these duties yourself since all you really need is accounting software, a computer, and a connection to the Internet. Another option is to engage in outsourcing to a professional dispatcher. Care should be taken when going this route, however, because these services tend to come at a high price, and making a mistake here can sink your profitability in no time at all.
Find a Niche Market
Last but not least, make a real effort to get involved with a market niche that is well-suited to your overall goals and objectives. Selecting a niche has a major impact on the type of equipment you will need, the distance you will be traveling, and the rates you will be able to command. Concentrate on niches that larger carriers tend to disregard. By focusing on more specialized types of loads, you will be able to differentiate yourself from competitors and generate the revenue you need.