How To Improve Trucking Business Management
Most people who work in the trucking business say that it’s unlike any other. However, there is one thing trucking companies have in common with every other organization in America. Without proper management, they will fail. However, with good trucking business management, leaders can create efficient businesses staffed by happy and productive workers. Here are a few tips to get you started.
Use a Top-Down Approach as a Transportation Management Strategy
When improving business management, many entrepreneurs create friction by starting with the drivers. Change needs to come from the top down. When drivers recognize that even the business owner and executives are held accountable for the new standards, they may feel more willing to accept new changes themselves.
Rather than target drivers, provide goals for them to aspire to and let each driver know what their expected contributions must be, whether they are a full-time or part-time worker. To ensure trucking business management initiatives are evenly applied, this should go for everyone on the team. That way, no group feels targeted.
Rely on Statistics and Analytics
Before any manager can set new goals, however, they must first start with a proper assessment of the company’s performance. However, if the business lapses on collecting data, it can’t measure anything. This, in turn, makes it difficult to carry out a proper assessment of not just where the business is but what it will take to bring it to the end goal.
The first step to resolving this issue is to install a transportation management system. By relying on TMS, managers now have the tools to track deliveries and assess the current situation with more than guesswork. They can then use this information to determine what the break-even point is, which allows them to set better goals for improving driver productivity and improving profit margins.
Reduce the Number of Sitting Trucks
One aspect of trucking business management that creates strong opposition from drivers is treating efficiency as a per-driver instead of a per-truck problem. Of course, a driver who regularly deviates from the route or makes late deliveries creates problems. However, spending too much time focused on drivers can create resistance instead of a team effort.
Instead, your transportation management strategy should focus on keeping each available truck on the road as often as possible. To do this, managers should increase their driver to the truck ratio from one to one. Some companies utilize two drivers to ensure the truck is always moving for long hauls. For shorter trips within a 500-mile radius or less, some drivers can take the weekend or night shifts while the others are taking their days off.
Match People to the Right Positions with Fleet Management
During improvement to trucking business management, restructuring may take place. What may happen at this time is that employees and contractors start making plans to jump ship before the guillotine makes it to them. Focus on matching people with the right positions instead of firing them. When some people get horizontal or vertical promotions, workers may dread the changes less.
Here are two examples of matching the right people to the most suitable positions. Ask drivers what their natural sleeping schedules and availability preferences are. You might be surprised to learn how many prefer nights and weekends, especially if it pays a little more. Similarly, you may have a worker who drivers respect and listen to more than others. Let them handle the interpersonal aspects of fleet management.
Work Directly With Clients
Not every business owner wants to handle sales, and if you don’t, that’s understandable. However, by including direct sales in your trucking business management strategy, you can eliminate the 10% to 20% fees on loads that you would otherwise pay. In most instances, a relationship with shippers is long-term, so even hiring a sales rep for a short period of time could be a one-time investment with long-term payoffs.
This is not to say that loaders and brokers should not have a place in your business. These professionals keep your trucks on the road. However, your goal should be to rely on their services less and less over time. When you do this, you are also in a position to charge shippers less, which creates a win-win situation for both sides.
Pay Attention to Cashflow
Trucking business management requires a lot of cash. While reinvesting into the business is important, it is equally important to keep cash on hand to pay for the cost of labor, trucks, insurance, and fuel. Failure to do so will cause a business to rely too heavily on credit.
While every business needs credit to thrive at some point, note that credit is always more expensive than cash. Even so, beware of sacrificing opportunities to maintain an unnecessary cash surplus. Always consider the tradeoff between revenue from the investment and the expenses of maintaining it through credit, if necessary.
Trucking Business Management Starts with Hiring a Trucking Consultant
Though improving management skills is similar to leadership development in any other industry, there are some things unique to trucking. Because of this, proactive managers often rely on professional consultancy businesses like us to keep them on track.
Trincon Group is on a mission to provide world-class support to the managers and entrepreneurs behind trucking companies in America. To achieve our mission, we provide trucking business management and consulting services, such as profitability analysis, driver recruitment and retention, business development and management development. For more information on how we can best serve your business needs, schedule a consultation today!