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The Secret to Cutting Costs for Small Carriers

Every business has expenses. And in today’s market, if you’re like most, you’re looking for ways to cut costs wherever possible. After all, lower costs often mean higher profitability. For small trucking companies, cutting costs may seem daunting, but it doesn’t have to be.

Understanding which costs to cut

When looking for areas to reduce expenses you first need to know which expenses to focus on. Each month your business—no matter its size—has two types of costs, fixed and variable. drive down small carrier costs

Your fixed costs (think rent, insurance, permits, cell phone bills, etc.) don’t change a lot from month to month. The other type, variable costs, includes things like fuel, lodging, meals, and repairs. Variable costs are fluid and will shift (sometimes drastically) from one month to the next depending on your business in that time.

While you might be able to get a better deal for some of your fixed costs, focusing your cost reduction efforts on variable costs will likely mean greater results.

Easy cost reduction strategies to get started

Cutting variable expenses starts with small changes in various areas of your business. The order is up to you, but I suggest incorporating one change before moving on to the next.

Fuel efficiency and driving behavior

Because fuel is such a large expense for most trucking companies, it makes sense to find ways to save on fuel whenever possible. A lot of driver behavior can affect fuel efficiency. Speeding can use more fuel, while reducing idling can save it.

Maintenance rather than repair

Trucks are complex machines. A lot can go wrong if they’re not properly maintained. And normally such repairs are costly. While it may seem counterintuitive to spend money maintaining your equipment, it can actually save on repair costs down the road.

Emphasize safety always

Promoting safety not only saves money, it can save lives. The cost of an accident can add up quickly, especially if there are injuries. Safety education—from winter driving techniques to ways to avoid back injuries—goes a long way in reducing high accident, citation, and insurance expenses.

Food and lodging budget

Eating and sleeping on the road can add up quickly, not to mention rough on drivers’ health. Some drivers add a refrigerator and/or a bed to their cab to help cut down on these kind of expenses. If that’s not feasible, setting a budget and sticking to it can also help.

Tracking your cost reduction progress

You can change many areas of your business, but the only way you’ll know if your cost reduction efforts are successful is if you have an accounting process to clearly show you the results of your actions. I believe an accounting system is the critical piece to small carrier profitability, and one area that drivers often overlook.

Define your own system

Whatever method of accounting you choose—software, an accountant, or some combination—make sure you choose an option that’s easy, simple, and maintainable. I often recommend developing a process of sorting receipts when you get them and then processing them on a monthly basis.

Working with a 3PL can also help streamline your accounting process. C.H. Robinson makes the accounts payable process fast and easy so you can seamlessly incorporate it into your overarching accounting strategy.

Run your business by the numbers

Most importantly, your accounting system must be powerful enough to offer reports so you can use your information to find areas to improve. After all, in order to achieve better results to you need to take better actions.

Carrier Spotlight 2018: Agristar, LLC.

Sometimes you just connect with people. It’s as simple as having a conversation on the phone and immediately you know that you just “click” with the other person. That’s exactly what happened when Ray Kaczar of Agristar, LLC., called into C.H. Robinson a year and a half ago.
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- Carrier Account Manager, C.H. Robinson

Key Carrier Spotlight: T Y A Truckn

Key Carrier Spotlight: T Y A Truckn | The Road

For the past few months, we’ve introduced you to each of our Key Carrier of the Year winners and shared a little bit about what makes them unique within the trucking industry. Our final winner in the owner/operator category is Billy Reece of T Y A Truckn, who’s dedicated nearly half a century to getting freight where it needs to go.
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Sanitary Transportation of Food Rule: What it Means for the Carrier Community

Sanitary Transportation of Food Rule: What it Means for the Carrier Community | The Road

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If you ever transport human food or perishable animal food in your truck, you may have already heard about the Sanitary Transportation of Food rule, which will take effect on April 6. It’s one piece of the larger Food Safety Modernization Act (FSMA), but this particular rule has more of a direct impact for the trucking business.
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- Director, Government Affairs- C.H. Robinson

What challenges face our trucking industry?

What challenges face our trucking industry? | The Road

What do you, as a carrier, want to talk about? All day, every day you’re bombarded with messaging. Maybe it’s TV and radio commercials telling you what products to buy. Maybe it’s a new government regulation telling you how to run your carrier business. Now it’s your turn to be heard—we want to hear from you. Read More…

- Director of Capacity Development- C.H. Robinson