March 21, 2023
With significant dips in truckload spot rates and diesel fuel costs spiking, you likely have questions about what you can do to set your business up for success. When the spot market is cooling down and expenses are higher than average, every dollar counts. Whether you’re new to the industry or have some experience under your belt, the following tips can help you reduce your operating costs, run your business more efficiently, and remain profitable.
This month, reefer and dry van spot line haul rates recorded the largest weekly decrease since 2020. According to forecasting experts, this trend is expected to continue as a result of more trucks entering the industry and limited freight to haul. This might seem scary, but with careful planning, you can ensure your business is prepared to navigate these turbulent times.
Much like purchasing insurance after you’ve already gotten into an accident, you don’t want to wait until you’re in a difficult position to begin preparing for the impact of a market downturn. Get ready now by following these steps:
Do you have a strong understanding of where your money goes each month? If not, now is the time to take a hard look at your operating expenses to determine where you are spending and see where you can save. This includes the monthly cost of fuel, taxes, tolls, maintenance, and ongoing subscription costs. It can also be beneficial to review your current insurance rates, in addition to your leasing agreement and factoring contract, if applicable.
Creating a business savings fund is good practice and especially helpful during difficult months. Start small by adding a percentage of your earnings each month that you feel comfortable with, and increase your contributions during particularly good months.
Operating on your own can be exciting and lucrative, but there’s strength in numbers when it comes to getting the best rates on everything from parts to fuel. “Saving money on fuel can be the difference between running negative and earning profit on a trip,” shares SmartHop customer, Benson Ocan.
When navigating the spot market, it can be tricky to determine which loads are the best choice for your business, especially if you are new to the industry. There’s nothing worse than seeing your driver complete trip you expect to be profitable only to get stuck in a weak market and waste time and valuable resources dead hauling. That’s why it’s important to plan for the long term instead of on a load-by-load basis.
With fuel prices this high, you will need to consider which routes are the most cost-effective. GPS software can help your drivers avoid traffic and take the most direct route. It is also essential to consider where they’ll fuel up in advance to ensure both the best prices and the lowest possible fuel taxes per trip.
It might seem counterintuitive to add to your expenses during times like these, but the right technology can help you earn more and ultimately pay for itself. Jose Rodriguez of Millennial Mindset Transport LLC experienced exactly that.
“It didn’t take long before I started seeing equal or more revenue, even after their fee,” he shares. “With SmartHop, I’m making more money and saving time — for me, it’s a no-brainer.”
You’ll want to do your research to make sure the product you choose is the right fit for your needs and keep track of your take-home pay during the first few months of use to evaluate whether or not it is working for your business needs.
If you love the freedom of running your own business but need some additional support, we can help. Some of the benefits of using SmartHop include: