Trans4mind Home Page
Home Article Library Transportation

Are Transport Companies Profitable?


There is a whole lot to marvel at, should one ever decide to look back at society's incredibly long list of achievements. Though, through all of our different accomplishments as mankind, it's pretty safe to say that none of it would have been possible without trucking. The ability to carry large loads of materials from one location to another was really what helped shape the world as we know it. And just because we're very modern now with our smartphones and other tech, that in no way means that trucking isn't every bit as important now. In fact, some argue that it's even more important, as we continue to spread and grow and innovate. Materials of all sorts still need to be delivered. Goods still need to get from point A to point B, and perhaps many more points than that.

Enter transport companies, also known colloquially as trucking companies. These business models vary from a few trucks delivering goods to very large fleets of vehicles, but the operations are basically all the same. The company is charged with hauling freight for a client, and that freight has to be moved safely and in a timely fashion. It sounds easy enough in principle, but there are all sorts of moving parts and complications inside of this industry. The bottom line is that trucking companies can be profitable, but there are no guarantees. Here are a few things these companies do to turn a profit.

4 Ways to Ensure a Trucking Business Turns a Profit

1: Understand Your Expenses

The first thing any successful company must be mindful of are the many expenses accumulated within this industry. From the outside looking in, most would assume that fuel is the only real expense of note. While fuel is very important, which we'll touch on more below, the fact is that it's only a part of many other expenses that need to be taken care of. Insurance rates, employee wages, maintenance costs, and much more can pile up. Businesses in this genre that end up successful understand all of these expenses and factor them into their business models while bidding for contracts. If you know where the money is being spent, it's a lot easier to divert the cash flow and ultimately save money.

2: Manage Your Fuel Costs

For years now, the average fuel costs for transport companies has been about 25% of their total operating costs. This isn't as bad as it seems; it's about the same that restaurants pay for food costs. However, what we see now in the early stages of 2021 is that fuel prices are going up a lot, and some companies are already estimating that their fuel expenses are now 30% or higher of their total operating costs. So it's vital that fuel is managed by driving on the best routes and using only skilled drivers who are more efficient with their fuel. Saving a little bit of fuel on each trip can add up to tens of thousands of dollars in savings every year, which is vital to keeping the company open.


3: Leverage Your Cash Flow

The most successful trucking companies out there, whether independent services or large fleets, know how to leverage their cash flow for extra profit without having to spend more on fuel. For instance, if a shipment of freight is heading out across the country, and there's still room in the truck(s), then what many companies will do is take on more freight, if it's on the way. This means that the company is using the same drivers and equipment, and the same amount of fuel, but they're doubling their production by handling two jobs in one. Of course, this requires a lot of skill and experience from the drivers in question, but it is a way that successful trucking companies earn a lot more without having to spend more.

4: Maintain Your Fleet

Fleet maintenance is also important, though a lot of companies wait until something is wrong before calling in the mechanics. This is because mechanics cost a pretty penny and most try to avoid using them unless necessary. However, trucks that are finely tuned with proper pressure in the tires and proper fuel injection, etc, run a lot more efficiently. Well-oiled machines, so to speak, burn a lot less fuel when they're delivering freight, which saves money. Not to even mention that handling these small issues is a great way to prevent much larger ones from arising.

Trucking companies can be successful, but only if they vigilantly maintain practices that are conducive for that success.

Read more Transportation articles
You'll find good info on many topics using our site search: