With startups springing up faster than mushrooms, everyone seems to be launching businesses based on innovative ideas, hoping to become the new giant in their chosen industry. You may hear a rare success story while the majority vanish as quickly as mushrooms tend to do.
Trucking is an industry with vast potential. As per the American Trucking Associations (ATA) report, the U.S. trucking industry has generated more than $700 billion in revenue in 2017. With the economy itself riding on the trucking industry, it is evident that the ones who are brave hearted enough to create and manage an efficient trucking company will be collecting profits from coast to coast.
While technology is what leads the way, you must know these 9 well-kept secrets of the trucking business if you wish to succeed in this highly competitive industry.
1. Detailed, Current and Instant Information
In any industry, good decisions mean good business. The quality of these decisions and their implementation is what drives the business success. One wrong decision can affect the entire company. Detailed and current information is required for understanding the “big picture” and making choices that impact your financing and progress. Lack of critical information can affect even the micro-decisions such as the assigning of resources on current outstanding orders.
How does information flow through your system? Orders are being accepted, processed and executed all the while fresh orders flow in. Invoices are generated, payments are transferred from clients to the company and then among contractors, operators, drivers and so on.
Well! That's just a small part of the story. All this information and more is being entered in computers or even worse in manual ledgers that often get misplaced. How do you quickly access a specific report or find the right information that you need?
For running a successful trucking business, you must have a customized software that quickly displays all critical business information on the screen, anytime you need it. You should be able to choose what specific information you want automatically displayed whenever this software is accessed: outstanding orders/ credit lines, accounts receivable/payable, owner/operator liability, net profits and so on. Different software may be needed for processing department specific entries. The contractors will need a software that allows them to enter the load specifics while the drivers will need a different software to log in their timings, cargo and miles. Remember the quote - “You can’t expect to overcome today’s challenges with yesterday's tools and expect to be in business tomorrow!”
2. Total Information Integration
Wow! Wave the magic software wand and all your information management problems vanish! Sorry, it's not that simple.
Individual sectors in your business may require different software and if these information management systems are not integrated properly, they can turn into soulless monsters that suck your company dry. Lack of coordination between the information from various departments can create bottlenecks that lead to frustrated staff members, irritated drivers, lost packages, unhappy customers, not to mention the resulting loss in tons of cash!
Total integration of the various software used in your trucking business helps create a master system where all the trucking orders, billing, picks/drops, additional charges, equipment assignments, invoice generation and so on, are all updated and available on a single screen. Real-time transaction processing updates all related data instantly, ensuring that you get up-to-the-second information. Data management tools like these are the secret to eliminating costly delays and confusion. Such integration ensures that data search and retrieval capabilities are spread across all the connected platforms to help you identify the right information when needed.
3. Customer Satisfaction
Finding customers to pay for your products or services is not an easy task, but retaining them is an even tougher venture. There are two basic types of customers in the trucking industry, the ones who go for the lowest prices and the others who value good service even if they have to pay higher for
Trying to win more customers with cheapest rates is a losing war as you will have to compromise on the quality of your service. Without adequate cash flow, you will not be able to hire quality drivers and keep safe, well-maintained equipment. You end up paying low wages to truckers who leave for better-paid jobs and your trucks end up with breakdown due to poor maintenance. Paying and treating truck drivers will ensure they put up better performances, leading to happier clients and a better reputation.
Reasonable rates, safe and secure transporting, and on-time delivery are the three most important factors that ensure customer satisfaction. Unforeseen circumstances such as the weather, accidents or detours can delay deliveries. Response and responsibility are the key to maintaining good relationships in such situations. Immediate communication and frequent updates can help retain customers even when you are faced with the worst scenarios.
4. Happy Truckers
Recruiting employees with talents that are aligned with the business goals of a company is critical to its success. Whether it be the office staff for handling the logistics or the drivers/mechanics of the truck drivers, putting time and effort into finding the right people help you hire the best performers in the industry. Even if you are able to hire the best employees, another key secret you must learn is - how to retain them and enhance their productivity.
Ensuring that your truck drivers are happy is a business strategy that pays well in the long run. There is no trucking business without the trucks. The trucks are useless without drivers to drive them around. So productive and efficient truck drivers are obviously the key to the success of a trucking business.
Respect your truck drivers and reward them well for their contribution to the company’s success. Ensure that they receive all their due benefits such as paid driver training, adequate home time, overtime or festival bonuses, insurance coverage, etc.
5. Quick and Accurate Settlements
If there is one thing that ensures a big smile on the face of your truck drivers, it's getting their paychecks on time. Seems like a no-brainer! But you may be surprised to find that many good drivers quit the company after constant battles, with the accounting department, to collect the pay that is rightfully due to them.
This secret to trucking business success is to ensure that all payments are settled on time, without any hassles to the parties involved. You need the right tools that quickly generate accurate and easy to understand driver settlements based on rates of pay, hours worked, miles driven, advances, charge-backs, etc. Default pay rates can be set up by revenue percentage, hourly rates, flat rates and loaded/empty miles, which enable the system to automatically calculate the driver’s pay from the order. When the order is completed, the payment gets credited to the driver’s account.
Losing good drivers can cost you big in terms of time and costs of recruitment, training, and potentially lost business. Having an Integrated Payroll System along with a Driver Settlement system not only saves time, but also eliminates costly errors from over-payments and missed chargebacks, and most importantly, it keeps your drivers happy.
6. Visual Dispatch System
If truck drivers are the legs that carry forward a trucking business then truck dispatchers form the backbone of the trucking industry. These are the behind-the-scenes people who not only make certain that truck drivers have their cargo, they also help the drivers concentrate on the right routes to their destination, stick to their appointed arrival times and safely deliver their loads. Poor customer-intelligence and obsolete order management tools reduce their efficiency and ultimately result in unbilled orders and lost loads.
To ensure that your dispatchers are at the top of their game, equip them with Real-time Visual Dispatching systems that give them full access to the data they need to take fast decisions when it counts! With such a software, they should be able to instantly move back and forth from the order screen to the dispatch screen, easily assign equipment and drivers and access related master files with a single click if the more detailed information is needed. Availability of equipment for orders should be easily available while double-clicking the location area of the equipment list should immediately bring up the equipment routing. An ‘all orders’ link should display orders with color codes to easily identify their stages of processing.
Having a fully integrated system as mentioned in the second point means that dispatchers and accountants will be able to view the same vendor and customer data, thus avoiding frustrating and costly screw-ups. It is vital that such a central system has a strong built-in security to protect the confidential information from unauthorized access.
7. Constant Cash Flow
Just like watering a plant, a constant cash flow is essential to keep a trucking business alive and kicking. Even if your trucking company is showing a good profit and your income vs expense statements look great, a lack of cash flow can cause your trucking business to falter and finally fail. This can happen when most of the profit remains tied up in receivables or non-liquid assets. Issues with billing times and outstanding receivables occur more when companies don’t have the time or manpower to chase down these payments. Work overload and errors lead to thousands of dollars of unaccounted money that just disappear through the cracks in the system.
To improve your cash situation, the first step is to eliminate order processing errors that result in transactions without invoices, lost cargoes, or overpayments to suppliers/drivers. It is important to introduce the right software that help reduce such errors and the time it takes to process your sales and manage the expenses. You also need to work on reducing the time gap between the delivery of your service and the payment you receive for it. Focusing your effort on improving these three angles of your business will definitely reduce your turn around time and boost your cash flow. Efficient management of time will provide your staff with more time to chase down outstanding receivables if any. Investing in the right software systems also enable you to run your company with fewer staff members, converting that expense into more cash flow.
8. Automated IFTA Reports
The transportation industry has many complicated rules and regulations. According to the International Fuel Tax Agreement (IFTA), interstate carriers must file fuel tax reports with the state where they are licensed. Carriers also have to file a quarterly report covering all of their qualified vehicles.
Streamlining administration and record-keeping of your trucking business can be a confusing and mundane task. Manually processing all the information necessary to make the report is time-consuming and costly as handwritten driver reports and related receipts need to be collected and interpreted. Some companies even hire outside contractors to handle their IFTA tax reports.
The smarter thing to do is to implement user-friendly telematics solutions that monitor and manage the mobile assets and employees. For filing fuel taxes effortlessly, IFTA software can correctly record the miles traveled in different states and report them accurately, thus avoiding possible fines and reducing audit risks.
9. Intuitive Trucking Solutions
The right fleet management solutions can reduce operating expenses and improve efficiency. If you are thinking how to start a trucking business, or maybe you already have one, but want to expand your business, then having a good trucking software solution can make a big difference in how quickly you become successful and efficient in this extremely competitive market.
A good trucking software solution, created by someone who understands the demands of the industry, will be loaded with features like managing and dispatching shipments, real-time tracking, freight bid management, and so much more. When looking for a trucking software solution, you should test it out to ensure that it has a user-friendly interface as well as a scalable architecture. The software should be customizable to suit your company specific requirements.
As a solution that has been specially designed to help you launch your own trucking aggregator platform, by providing value-added consultation, technology, and continuing support, Truck Pulse is a great choice for startups in the industry as well as the biggest players in the trucking game. The solution suite comprises of native Android & iOS apps for shippers and truck drivers, plus a powerful web panel for admins and carriers.
Learning, understanding and executing these 9 points can help you launch a successful trucking company, even if you are starting out with just one truck and stars in your eyes. The secret of how to run a successful trucking company is not the hard work, it’s about being smarter.
The right support systems can take the load off your back. These can be as simple as having a fuel card that enables you to save thousands of dollars in fuel costs or computer software that simplify your order processing and accounting. Dedication along with a little hard work can turn your dream of owning a trucking company into a truly impressive fleet. Be smarter than your competition and implement the above-mentioned secrets to reap truckloads of profits.
Nitin Lahoti is the domain expert of Logistics and Transportation. He has 12+ years of experience in Design, Business Development and Startups. His expertise is in Product Ideation, UX/UI design, Startup consulting and mentoring. He prefers business readings and loves traveling.