As an owner-operator or owner of a trucking company, your profit margins are directly impacted by how much money you spend to run your business, i.e. your operating costs. Understanding how much it takes to run your trucking business each month helps you identify any redundancies and reduce expenses, which ultimately can up your take home pay. In this blog, we discuss common monthly trucking business expenses and best practices for reducing your expenses to increase your profit margins.
Know Your Cost Per Load
Do you know on average how much you spend on each load that you accept each month? If not, now is good time to start. Knowing your cost per load can help you develop a strategy for running your trucking business and drive your rate negotiations. Once you’ve calculated your average cost per load, you also can easily determine how many loads you need to run in order to meet your monthly revenue goals.
To calculate your cost per load, divide your monthly expenses by the number of loads you ran for the month. You may want to separate your expenses into two categories: fixed and variable. Fixed expenses are the same every month (for example, lease payments and insurance), while variable expenses often change from month to month (for example, load boards and fuel).
Common Monthly Expenses
If you want to reduce your expenses, one of the best ways to start is to determine what your highest monthly expenses actually are. If you’re an owner-operator, your top expenses are likely your truck, fuel, maintenance, insurance, lodging/meals and broker fees. If you’re the owner of a trucking company, you can add staffing to that list of expenses.
When tabulating your expenses, it’s important to include all of your operational costs, from fuel, lodging, tolls, parking and meals to the cost of permits, broker fees, load board subscriptions, taxes, mobile app subscription fees, tires and maintenance. Every dime that goes out of your business matters.
Choose Tools That Help Reduce Your Expenses, Save Time
One of the easiest ways to reduce costs and increase your profit margin is to use free or low-cost solutions in your business. If you’re paying for subscriptions to seven different load boards each month, you may want to consider a more economical way to find loads. Better options do exist. The Trucker Tools driver app is free for truckers and trucking companies and it includes a digital freight marketplace that helps you find high-quality freight in a matter of seconds, not minutes or hours. You can easily eliminate monthly load board expenses by using the Trucker Tools driver app in your business.
Using free, multi-functional tools such as Trucker Tools’ free driver app can help make your operations more efficient and reduce your monthly operating costs, whether you’re an owner-operator or the owner of a trucking company. Lost time really is lost money in the trucking business. Every check-call, traffic jam, snowstorm, breakdown or delay reduces the time that you have available for driving or finding and booking that next load.
The Trucker Tools driver app includes 17+ tools and features designed to make your trucking business more efficient. When you use the driver app, you have real-time information on truck stops, fuel prices, optimal routes, traffic, weather, nearby repair shops, medical facilities and available loads literally at your fingertips. You also can book loads with preferred brokers/3PLs directly in the Trucker Tools driver app using Book-It-Now and track detention time with the app’s load track feature.
Want to learn more about our game-changing Book-It-Now tool, included in Trucker Tools’ free driver app? Read Use Trucker Tools’ Book-It-Now to Increase the Profitability of your Trucking Business. To download Trucker Tools’ free driver app, visit https://www.truckertools.com/carriers.