The trucking industry is the backbone of the United States’ economy. Without the trucking industry, nearly every other industry would grind to a halt. That’s why it’s still profitable to want to start the ultimate trucking company, even in the face of a constantly changing economy.
To date, nearly 70% of all freight shipped in the United States goes by truck.
Each year, 10.5 billion tons of freight is shipped via 3.4 million Class A semis, driven by over 3.5 million truck drivers. The trucking industry generates $726.4 billion in revenue, annually, accounting for 81.5% of the overall freight economy in 2015.
The trucking industry has been gaining momentum in 2017, following decreased manufacturing, shipping rates, a shortage of drivers, and harsher federal guidelines. Economic activity, in general, is on the rise in the United States making this an excellent time to transform your freighter business into the ultimate trucking company.
But what, exactly, does the ultimate trucking company look like? And how should you get there? We’ve compiled 9 steps to create the ultimate trucking company to get your whitewalls turning!
9 Steps to Create The Ultimate Trucking Company
To begin, let’s start by defining what makes for the ultimate trucking company. First and foremost, excellence in the trucking industry comes down to customer service and satisfaction. Your customers are the 15w40 keeping your crankshafts turning. Emphasizing satisfaction and lowering prices are two of the most consistent ways to ensure repeat business and customer loyalty.
The Three Main Qualities Of The Ultimate Trucking Company
- Customer-centric: Offering customer-oriented pricing incentives, services, and competitive prices are common characteristics of many of the trucking industry’s top leaders.
- Customization: Customization is key to flourish in today’s business climate. Your customers have specific needs, which may be always changing. The ultimate trucking company can change gears in an instant, without ever missing a beat.
- Competitive Pricing: The bottom line is, well, the bottom line. Customers are always going to be looking for the best value at the lowest price for a service. Give your customers the best deal possible, especially your loyal customer base. Consider locking in prices, for some of your biggest clients, and employing fleet tracking systems for maximum efficiency.
Step 1: Create a Business Plan
Now that we’ve defined what the ultimate trucking company is and does, let’s take a look at the steps to get there.
Before a single freighter leaves your lot, you’ll need a business plan. Think of it as a “10-year plan” for your freight carrier business (or a “10-month plan,” depending on how much of a hurry you’re in.) A business plan will help you determine:
- What equipment you’ll need.
- If you need to purchase or lease new equipment.
- The number of drivers you’ll need to implement your business plan.
This business plan will be your blueprint and roadmap towards creating your ultimate trucking company. Business plans are essential for not only sticking to your goals but also reporting on those goalposts to your investors and shareholders.
Step 2: Make Sure Your Licenses, Permits, and Forms Are Up-To-Date
In addition to complying with general federal and state guidelines, there are license, tax, and permit regulations to adhere to as well.
Depending on what kind of ultimate trucking company you’re running, whether you’re delivering for small businesses or the construction industry, there are a few regulations which are particularly important.
- Federal DOT Number and Motor Carrier Authority Number’ Learn the DOT requirements, and then apply for the Federal DOT Number and Motor Carrier Authority Number here Federal Motor Carrier Authority’s website.
- Heavy Use Tax Form (2290)’ Make sure to comply with state and federal tax regulations related to the heavy use of U.S roads using IRS Form 2290.
- International Registration Plan (IRP) Tag’ Find out the requirements to obtain IRP tags by visiting your state’s transportation website and IRP portal.
- International Fuel Tax Agreement (IFTA) Decal’ Learn the requirements to obtain IFTA decals by visiting your state’s transportation website.
- BOC-3 Filing – Contact a processing agent and the BOC-3 filing option to obtain and continue active your operating status.
Step 3: Assess Your Fleet
After obtaining the correct permits and licensing, you’ll need to determine if you have the right gear to realize your ultimate trucking company.
First, you’ll need to decide if you’ll be purchasing your equipment or working with truck rental companies. This will depend on the budget you’re working with, the current status of your equipment, and what kind of freight you plan on hauling.
To help you decide whether renting or purchasing equipment is the best choice for you, consider:
- Your current budget;
- The cost of owning vs. the cost of renting your fleet;
- The duration of the project or job;
- Equipment availability; and
- Fleet Management and Inventory Control.
Step 4: Find Loads To Haul
Now that your ultimate trucking company is up-and-running, you’ll need some freight to carry. To begin with, you might alert your current customers via online promotions, e-mail marketing, or social media campaigns.
To branch out and find some new business, you might consider using online load boards. There’s a variety of free load boards out there, like NextLOAD.com, as well as lots of paid subscription-based services.
Load boards help you find and create relationships with new customers, as well as a number of brokers and shippers. These can turn into loyal, on-going clients, making online load boards worth a look.
Some other online load boards worth your time include:
Social media may be an excellent source of freight to haul, as well. With 1.37 billion logging onto Facebook daily, it’s an essential online market that cannot be overlooked. It’s also possible to check reviews, product pages, and online communities for trucking company owners. Consider spying on your competition, watching what they’re getting right and wrong. Customer complaints can give you a shortcut towards your ultimate trucking company, by learning from their mistakes.
When choosing an online load board, keep in mind:
- Investigate the best and most popular job boards.
- Don’t take risks with paid load board subscriptions.
- Consider your current budget.
- Start with the most established and best-known, first.
Step 5: Keep Track of Your Ultimate Trucking Company’s Expenses
In a business as competitive and evolving as the trucking industry, it’s essential to remain competitive. You’ll need a solid business sense, in addition to an understanding of the trucking industry to truly remain on top.
The most important expenses you’ll need to monitor for your trucking business are:
- Unforeseen Expenses
Remember to keep in mind how often these expenses need to be paid, as well. Some are weekly and some are monthly, so plan accordingly. You can also use our fleet trackers, as well, to make sure your ultimate trucking company is running as efficiently as possible.
Step 6: Make Cold Calls and Expand Your Customer List
Finding new, useful leads is the core of what sales and marketing are about. That’s because it’s probably the most difficult, most time-consuming, and most expensive part of expanding a trucking company.
A freight brokerage is one way to avoid the hustle. Freight brokerages are companies or individuals that connect freight carriers with manufacturers and asset holders. They broker deals with the people who need things shipped and freight carriers, and then invoice the deal.
The Transportation Intermediary Association (TIA) is one of the most reliable freight brokerages, specializing in education and policies for North American transportation intermediaries.
With a single freight brokerage sometimes having accounts with thousands of shippers, it can be highly practical to have a relationship with these intermediaries. One of their accounts may have a sudden surge in production or shortage of shipment options, which can turn into a steady and sizable paycheck.
Step 7: Monitor Your Cash Flow
Cash flow problems can come unexpectedly, in the trucking business. You’ll need to keep a close eye on how much money you have on hand, how much is coming in, and how much is being paid out.
One way to monitor your trucking company’s cash flow is by keeping a close on eye on expenses and efficiency. Optimizing your fleet of drivers using dispatch solutions is one effective route to take. Monitoring performances using ELD logs is another.
Consider keeping track of your current expenses. Explore various ways to cut expenses, and put the money you saved in a special savings account. This can give you a vital source of backup funds in case something happens.
Should something arise and you be caught with a shortage of cash-on-hand, freight factoring is an essential resource to know about. Freight factoring is a process that speeds up the cash flow, involving a third-party company called a freight factor. After you deliver a load, you invoice your customer, then send that invoice to the freight factor. The freight factor then sends an advance, minus an agreed upon fee.
Freight factoring costs around an average of 5 to 10%, but it varies from company to company.
Here’s a list of freight factoring companies recommended from Business New Daily.
Step 8: Manage Fuel Efficiency
Fuel is the second largest variable expense for trucking companies, right after vehicle depreciation. While it’s impossible to control how much fuel costs, it is possible to monitor our fuel habits, to make sure we’re being as efficient and cost-effective as possible.
For Truck Drivers:
- Avoid quick acceleration or deceleration. This uses more fuel.
- Don’t idle at a rest stop. Even running a truck for half an hour on a 100-mile trip can reduce mile-per-gallon by 33%
- Drive slower. It uses less fuel and causes fewer accidents.
- Allow extra time to drive through bad weather. It’s recommended to slow your speed by 1/2 to 1/3 during wet or snowy conditions.
- Limit how long you warm up your truck (unless it’s sub-zero conditions.)
- Study the weather and route conditions before leaving for a trip. Plan the best route using Google Maps and GPS Technology.
- Do routine vehicle inspections before and after every delivery. Have an itemized checklist of common problem areas, and go over them one-by-one.
For Trucking Companies:
- Be honest about your cost-saving efforts. This will help get drivers on-board.
- Hold regular performance meetings. Go over your driver’s logs and explore areas that could be improved. Remember to emphasize achievements as well as areas that need improvement to improve morale.
- Ask for your drivers’ input on how to save on fuel. Have an inbox where they can leave those suggestions.
- Give your drivers the best tools, like the most modern GPS technologies, for maximum efficiency.
- Maintain contact with your drivers while they’re on the road. Address any concerns immediately.
- Ask your drivers questions. Get to know them. They might open up and tell you something they were hesitant to bring up initially.
Step 9: Hire the Best Dispatchers
Dispatchers are the mission control of the trucking industry. Finding the best, most professional dispatchers possible, and arming them with the latest dispatch solutions, allows them to:
- Recommend the best route for a driver.
- Understand the trucking industry.
- Learn the drivers’ habits.
- Maintain strong relations with the brokers and shippers.
- Stay a step ahead of everything.
Building and maintaining the ultimate trucking company involves time-honored business practices, like monitoring payroll, expenses, and revenue flow. It’s also a matter of innovation, of paying attention to the latest tools and trends in the trucking industry and being willing to adopt new strategies to meet the future in high gear.
Are You Ready to Find out How the Latest Trucking Technology Can Help Your Trucking Company?
It’s an exciting time in the trucking business. Leaders and innovators can truly flourish. Check out our line of GPS-related products, and optimize your fleet to be its best.