When you drive along the highways, you’ll notice big trucks plying the roads. Trucking is indeed a profitable business because this industry is an essential component of trade. If you’re thinking of getting into the trucking business, it is actually a great source of income, provided you know what you are doing.
Competition abounds, so you’ll need to up your game to stay one step ahead of the pack. Getting your trucking authority from TBS can really help get the ball rolling. Succeeding in trucking takes more than knowing how to drive a truck or choosing a route. Consider the following suggestions below in order for you to be a successful trucking business owner.
Support and Choose the Right Niche Market
This is by far the most important component you must consider as a truck owner-operator. Whether big or small, you must support and choose the right niche market because it will determine the machinery you purchase, prices you charge, and freight lanes your trucks can service.
Beginner owner-operators must focus on untapped markets of huge carriers. In short, avoid what they service and, instead, focus on hauling specialized loads. To illustrate, making an income in the dry van commodities market will be a struggle because large carriers abound in this area.
However, hauling fresh meat and produce in reefer vans have many benefits. There are fewer competitors, there’s work all year round, and there’s resistance to recession should the market be in one. The last one is a critical component of your trucking business’s survival.
Command a Great Rate Per Mile
Price is one of the things that you must know how to set. Charging your client the right amount to haul their load is crucial because charging too high means you lose business and charging too low means your profits will be limited, so paying your operating costs will be a struggle.
Know your pay rate before marketing to shippers because you must be competitive with what the brokers offer them. You can determine this amount by selecting your freight lane and checking load boards. Then ask brokers to find out how much they pay. Get the average then add ten percent to get the final price brokers charge their shippers. Repeat this process for various directions, and then you’ll know the pricing in the market.
Figure Out Your Overhead Costs
As with any business, it is critical to know your overhead costs to keep the business running. Knowing your operational expenses will give you an idea if you can make a profit. List down all the fixed costs like truck payments, business permits, vehicle insurance, etc.
Then list variable costs such as the number of miles driven, along with estimated fuel consumption. You then total all these costs and subtract it from the rate you charge to get an idea of your total profit.
Utilize a Good Fuel Consumption Strategy
It is pretty obvious that fuel is the biggest expense in trucking. In order to make money, be creative and save money on gas so your overhead cost won’t be too high. The cheapest pump price won’t give you the most savings. Instead, you must buy fuel at the cheapest base price regardless of the pump price because you are being killed by the fuel tax.
On top of that, consider purchasing fuel that gives you rebates through your card or points that get your added perks. There are many ways to save on gas if you are creative enough.
Bypass Brokers and Work With Shippers
Load boards and brokers are helpful when you have an empty truck. However, they charge a big commission from ten to twenty percent off your load price. It would be best if you can minimize your transactions with them, but develop a relationship with the shippers themselves.
If you have proven yourself to these shippers, you can book loads directly and minimize the middleman charge. You can charge them a competitive price and keep all the payments for your company. Do this right and you’ll grow a stable list of shippers in your client roster.
Have an Efficient Office
Last but not least, you must have an efficient office if you want to stay successful in the trucking business. You can do this yourself or you can opt to hire a reliable staff. Managing an office means having a great dispatch system and being able to keep track of all the paperwork. This component is crucial for a cash-flow dependent business like trucking. You need to have someone document your fuel consumption, payments, receivables, and the like. This is one aspect that you must take care of if you want to succeed in this industry because trucking is not just merely driving from point A to point B.