If you’re a smaller truckload carrier, you may think you have to fight harder than ever to compete with more prominent carriers. But there are lots of tactics you can use to fight smarter, rather than harder, and give yourself a leg up:
- Know your break-even points. To set profitable rates, you can’t let someone else set your hauling rates. Instead, develop a good sense of your break-even points.
- Be willing to listen to your employees. Drivers, dispatchers, safety personnel, and salespeople are all vital sources of outside-the-office knowledge.
- Keep an eye out for innovative cost-saving ideas. Industry veterans can provide information to help you become a leaner, tighter, more efficient hauling organization. And stay on top of the trends and news from your shipper’s perspective.
- Know your customers. How’s their credit rating? Are they a risk to your revenue-producing capacity? Are they projected to grow? Facing company or industry problems, labor troubles, foreign competition, recalls, or product or patent lawsuits? A single customer shouldn’t represent any more than 25% of your total revenue or accounts receivable because if they went away, it would be a significant loss to your bottom line.
- Groom your network to develop new prospects. Success means constantly developing relationships with companies, brokers, and individuals who can provide you with new hauling opportunities. Teach everyone in your company that touches customers how to upsell services. Perhaps offer a finder’s fee, such as $100 for each referral that becomes a customer.
- Offer credit only after careful consideration. Do you want to be a lender? If you allow a shipper customer to pay on credit, you’re a lender. And while this move may enhance your revenue, you’ll need to make lending a strategic decision with limits and controls to avoid cash flow nightmares–or worse. The Axele TMS integrates with factoring systems like Apex Capital. By integrating factoring into the TMS, small to medium-sized carriers can improve cash flow and save time with accounting processes.
- Stop raiding the piggy bank and think like a banker for sustainable growth. Suppose you’re an owner who unknowingly takes cash from your trucking operation for personal uses. In that case, you’re not able to determine your actual break-even point or correctly develop your hauling rates or determine your daily and weekly cash flow needs. Invest in your company instead: Leave enough cash in the coffers to make the worst of times your best of times and set yourself on the road to self-capitalization.
- Choose a feature-rich transportation management system (TMS) with enterprise TMS features and data analytics. A smaller truckload carrier still needs great technology. With the right TMS, you’ll be able to connect to all systems, from load boards to accounting systems and ELDs; track and trace for improved shipment visibility; use a mobile driver application to improve communication, invoicing, settlements, and document management; and benefit from centralized load management. A rich TMS also lets you automate manual processes to minimize data entry, do “smart tracking” of driver schedules and assets, and access KPI dashboards and optimization so you can find the most profitable load based on driver preferences and hours of service. Lastly, you’ll master smart load selection, trip planning, and quote evaluation.
Smaller truckload carriers are the backbone of trucking. But many carriers lack the inboard tracking units and back-office technology to deliver real-time visibility to shippers, leading to lost loads, inefficiency, and confusion.
Whether you’re a smaller truckload carrier hauling directly for a shipper—or contracting to larger carriers or 3PLs—you can compete and thrive using a powerful yet affordable TMS like the Axele TMS, which features many of the functions found within an enterprise TMS. Contact Axele today.