Running a profitable fleet or trucking business is no easy task. There are plenty of factors to consider in order to keep things running smoothly and efficiently. But what do you do when economic conditions take a turn for the worse? You may already be losing up to 65% on the most common fleet investment as it is.
There are still ways to run your fleet in a cost-effective manner and maintain a profit, even in tough times. In this article, we’ll share some tips on how to stay profitable even during inflation, high fuel prices, or a recession.
Let’s dive in…
Calculating the cost of your current fleet management strategy is critical for making future adjustments.
First, you’ll need to take into account the costs of the essentials before moving on to the rest of your strategy. These costs can vary widely depending on your industry. Likewise, the scope of your operation and other aspects unique to your business will play a factor. Whether you run a trucking company, rental fleet, taxi service, or service business, you’ll need to nail down the essentials.
By taking all of these factors into account, you can get a more accurate picture of the baseline cost of your current fleet management strategy and navigate the more irregular expenses from there.
This is the first step toward running a profitable fleet business.
With high fuel prices, cutting consumption has become a top priority for many fleet managers. Fortunately, there are a number of simple techniques that can help to reduce fuel usage. And of course, always avoid idling whenever possible.
Similarly, make sure to choose a fuel card that fits your business. Almost all cards offer discounts and rewards, so the trick is to pick one that will reap the largest benefits for your operations and increase profits.
Finally, don’t forget that one of the most effective ways to reduce fuel consumption (and improve safety) is to simply slow down. Driving at 75 miles per hour rather than 65 can increase fuel usage by 27%, so lowering speeds can have a significant impact on your bottom line.
For all of our best tips on how to reduce fuel costs, read our in-depth fuel-saving tips article here. Here’s a short summary:
By following these simple tips, you can make a real difference in your fleet’s fuel consumption.
Every business has to find ways to minimize costs in order to be successful. For fleets, one way to do this is through strategic car or truck financing. By shopping your rates against other offers, you can make sure that you are getting the best possible deal.
Additionally, by purchasing a used vehicle between 3-10 years old, you can avoid wasting money on the purchase price while still getting a quality vehicle with low maintenance expenses. For example, a $100k commercial vehicle is worth $44,800 after only three years. That’s a staggering 65% drop in value.
Any business that relies on a fleet of vehicles knows that an unexpected repair and downtime can be a major drain on resources. That’s why preventative maintenance is so important. By keeping a regular inspection and maintenance schedule, businesses can catch problems early and avoid more costly repairs down the road.
It’s also important to budget for surprises. No matter how well you plan, there will always be unforeseen expenses. However, by setting aside funds each month, you can help ensure that your business is prepared for anything.
By taking these steps, you can help ensure that your business remains successful.
As a fleet manager, ensuring your drivers are safe and efficient is half the job. Telematics can help you do both by providing detailed data on driver behavior and performance, and feedback.
By regularly analyzing this data, you can identify trends and take steps to improve safety and efficiency. For example, if you see that one of your drivers is consistently speeding, you can provide coaching or incentives to encourage better driving behavior.
Or if you’re using a tool like DriveShield, you can automate driver coaching based on specific criteria.
In addition, you can lower fuel consumption and save time by implementing a route optimization software like Route Matrix.
By taking advantage of telematics, you can save money and keep your drivers safe.
Two of the greatest expenses for any fleet are wasted fuel and time. Thankfully, there are ways to minimize both of these.
To start with, you can avoid traffic congestion and wasted time by ensuring that your drivers are using up-to-date commercial GPS units. This will allow them to find the most efficient routes possible and receive live traffic updates and re-routing.
One way to boost profitability is to be mindful of invisible load-carrying costs. Things like mountainous terrain, heavy loads, and aerodynamic drag can all increase fuel consumption. Analyze these factors and more when choosing between loads and plan your routes accordingly to avoid unnecessarily high expenses.
One way to do this is to take into account cargo weight when looking for loads. Naturally, heavier loads greatly affect fuel economy. Similarly, take as much time as you can afford to avoid running a deadhead (driving a tractor-trailer without a paying load). It can be worth it to wait a few hours rather than returning without a load.
Another way to improve profits is to learn to negotiate better rates. Building relationships with brokers and other freight providers can potentially lead to repeat business at a discounted rate.
Staffing often incurs many hidden expenses. How you manage your team can seriously impact your profits.
First, take every possible safety precaution and ensure only trustworthy drivers are on staff. One way to do this is to conduct a PSP check on drivers before hiring. A clean operation will lead to lower insurance premiums, fewer accidents, better gas mileage, greater efficiency, and better service for your customers.
Second, don’t neglect staff or driver retention and training efforts. Training new talent can be riskier and more expensive than time spent on keeping your current team intact. Keeping your office team, servicemen, and fleet drivers happy and healthy will also improve your fleet’s profitability in the long run.
Finally, don’t skimp on proper training. It’s better to invest in employee development and good habits than to burn profits on bad ones. Keeping your fleet running smoothly and profitable is far easier with great training in place for your entire fleet.
Avoiding unnecessary problems is the hallmark of a great manager.
By taking these simple steps, you can protect your fleet and your bottom line.
Financial literacy is key to keeping your business afloat.
Here are a few practical tips to help you run a profitable fleet:
By practicing financial literacy, you can avoid common pitfalls that fleet managers face and keep your business running smoothly.
A great fleet management plan is essential for any business that wants to stay in business and maintain a competitive edge. It’s critical to develop a strong fleet management strategy that will save time and money and help you meet your business goals even during hard times like recessions, high fuel costs, and market fluctuations.
By following these tips, you can develop a strong fleet management strategy that will give your business the competitive edge it needs to succeed.
As a fleet manager, it is essential to have a dedicated plan and find ways to automate and streamline your operations. By doing so, you will save time and money while keeping your business running smoothly. Invest in a good fleet management software system and use it to track routes, dispatch vehicles, and calculate costs. Finally, always be on the lookout for ways to operate more efficiently in regard to finances.
By following these tips, you can develop a strong fleet management strategy that will give your business the competitive edge it needs to succeed and earn a profit, even with high fuel costs, recession, and inflation.
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