Tips for Reducing Trucking Costs (Part 2)

trucking costs

As a risk management approach that includes truck insurance and safety-oriented operating practices, fleet owners know that controlling expenses is the key to survival in a competitive marketplace. In the first part of our two-part series on reducing trucking costs, we introduced common expenses, then discussed several critical components of cost management. In this second part, we will share even more tips for reducing the costs associated with trucking operations, positioning you for success well into the future.

Route Planning: Reducing Per-Mile Expenses

Saving money on fuel is an important part of the modern commercial trucking fleet. Fuel-saving devices, advances in engine management, and aerodynamic features on trucks and trailers have helped to slash fuel expenses, but these are not the only solutions available to fleet owners.

Route planning plays a vital role in managing costs – not only in fuel savings but in avoiding less-than-load trips, “deadheading”, and even helping to keep drivers and their vehicles safe. A good routing plan must include:

  • Driver delivery, fueling, and scale scheduling.
  • Time for rest breaks or overnight stops.
  • Potential road and rest area hazards.
  • Hours of service regulations.
  • Availability of essential services on the route (maintenance and repair facilities).

Today’s fleet owners use advanced GPS and logistics systems to provide granular oversight of vehicles anywhere along a route. In addition to planning routes, these systems can be used to help drivers avoid unexpected hazards or changing weather conditions on the fly. For avoiding the practice of deadheading, or making return trips with empty trailers, trucking logistics system can be paired with load boards, allowing fleet managers to ensure their vehicles are always operating with partial or full loads.

Administrative Expenses: Hidden Costs to Manage

When one thinks of the trucking industry, drivers, vehicles, and dispatchers come to mind. While these are three of the most important assets of any trucking operation, there exists a vast assortment of “behind the scenes” players. As with fuel, truck insurance, and safety costs, administering the trucking business itself can result in runaway expenses if not monitored carefully. There are two plans for administering the business:

  • Outsourcing key tasks
  • Bringing human resources and accounting in-house

Lean, efficient companies know that focusing on core strengths is the key to long-term success. For smaller companies, outsourcing tasks such as billing, payroll, and human resources makes economic sense, allowing them to concentrate on what the trucking company does best: fleet operations.

Unfortunately, employing third-party services can be expensive. Whether you choose a professional employment organization or a fleet logistics firm for help, hidden costs can negatively impact your profitability. To counter runaway costs associated with third-party service providers, many trucking companies are seeking ways to manage HR and billing services on their own. This may require multitasking on the part of office staff; to get the most from this process, it is critical to identify the strengths and skills of staff members, then delegate tasks to them accordingly. Bringing these operations in-house also allows for better managerial oversight, giving fleet owners the ability to pinpoint areas that need improvement before they can result in unforeseen expenses.

Finally, multitasking by bringing tasks in-house helps keep the ratio of administrative personnel to drivers in line with industry best practices. According to one industry expert, trucking companies should aim to have one non-driver for every five trucks in the fleet in order to save on administrative expenses. This ratio may not always be achieved, but it is a target to strive for.

Throughout the cost evaluation process, fleet operators must ensure their truck insurance policies reflect current and evolving risk profiles. With the protection of truck insurance backing operations and safety-oriented practices, controlling costs is a valuable component of a healthy and financially-secure trucking company.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!