Before we talk about tips for growing your trucking business, we should check the stats out.
Operating ratios (ORs) for dry van carriers in the Truckload Carriers Association (TCA) Truckload Indexes program had contracting growth in 2019.(Freight Waves)
Hence there is saturation in the trucking business that one needs to cater, even before talking about growth. Now as the pandemic has taken strong roots there is much more competition of survival. But the great truckers who do not have business acumen will die during this phase, while those who will work strategically will survive and even grow.
Work on the Right Niche
If you are a small fleet you might be hit most if you select the wrong niche. The dry vans that have easy carriage of load are competitive to the extent that making decent profit seems a myth. So select a market that has less competition and think of long-term benefits instead of a short-term edge.
Selecting a niche is crucial as it determines the equipment required for working, rates that you will charge, and freight lane you can service. Go for hauling specialized loads that big carriers do not go for as the competition is less. You should check if the work is year-round and if you find a business that falls under necessity it will be recession-resistant. An example of such a business can be meat carrying vans that are required even today when the whole world is under lock-down.
Charge Market Competitive
As everything is getting online, finding the best price in the market is easy. Simply go online and select a fright lane. Go to load board and find the 10-15 loads going in one direction. Check the price out and make your best price. Do remember that you should be able to get a nice profit and pay all operating costs. Your prices are neither too high that the client might not agree nor too low that your profit for functioning is compromised.
The second part is about knowing the operating cost. Note down the fixed cost that includes truck payment, insurance, and other things that remains constant no matter the number of miles you drive. Now work on variable cost with approximate miles you expect to cover. The total of the two will be your overall operating cost.
The Right Way to Buy Fuel
Even experienced drivers make the mistake of buying fuel based on cheap pump prices. As this way people buy fuel, but the tax for trucking companies is based on the amount of fuel used on the journey. So it is better to buy based on a cheap base price.
Manage Relations with Shippers
Intermediaries have their functioning cost, so they should be used until your business is new. Involving load boards and brokers can be useful when you have an empty truck, but you should make a pool of shippers and manage the business directly. From the first day of business your aim should be to build relations, so at times compromising on profit margin might also help.
These are the major tips for growing your trucking business, you can add more to it based on your experience in the industry.