Trucking is a cyclical business and after most carriers enjoyed some record financial quarters, the economy seems poised to turn south. The risk of a U.S. recession is now 60% according to consensus estimates. But there are things trucking companies can and should be doing to safely weather any kind of looming economic storm.
Reporting on business metrics positively will help managers and stakeholders make lucrative decisions that limit the risk to employees.
- Create a scorecard for each month detailing fleet size, fuel consumption, and repair costs, while highlighting any benefits received from vendor discounts or partner programs. Then compare those losses to profits gained by holding fast with effective business practices and structured evolution.
- Provide higher-ups with ways to cut expenses and impact operational efficiency without sacrificing quality, ability, or continuity. If assets aren’t being utilized, propose ways to impact the bottom line by repurposing or removing them.
Don’t stop investing
The worst thing to do in a downturn is to stop investing. You can’t cut your way to profitability. You have to have a plan and stick to the plan. Investments in IT projects, facilities, and new equipment should not be shelved. Every time the economy starts to slow, we want to extend the life of our equipment. But this way, repair costs will rise, putting the carrier in a hole that’s difficult to emerge from. So, continue to invest in your good people, your drivers, your employees.
Optimize your network
Examine your network and focus growth and investments in the most profitable lanes. Discuss with customers which lanes are a good fit and which aren’t, and allocate available capacity to those that make the most sense for both parties. Fleets need to assess each load and lane in their network, based on the revenue they generate and the cost and time it takes to service those lanes.
One thing many carriers don’t have access to is accurate transit times. Take that into account. Give a profit score to every load. Right now would be a good time to start if you’re not already doing that. If you’re responding to RFPs (requests for proposals) without this data, you’re loosing money.
It’s hard to predict when the economy will level out after tanking, so taking steps to prepare for the worst will prevent negative consequences. For fleet managers, the first steps should be protecting employees and assets, removing unnecessary processes, and digitizing manual methods to save on supplies and retain valuable time.
IoT and telematics tracking in trucks can reveal whether specific vehicles use more fuel than others. Fleet managers can then perform repairs to make them more fuel-efficient or replace them with newer, more economical alternatives. Similarly, data over time can highlight which routes lead to the highest diesel consumption, informing future route planning.
Link2Pump is an alternative that helps fleets managers to save fuel. You can improve delivery planning and fuel distribution management, saving money without losing effectiveness and deadlines.