Transportation can be a tough industry. The cost of fuel can rise unexpectedly, bad weather impacts routes, and it costs money to maintain a vehicle fleet. You also have to find skilled, reliable drivers, which can be surprisingly hard.
Although it’s not easy, many companies earn decent profits in this sector, including private cars, buses, taxis, trucking companies, and rideshare organizations.
Do you run a transportation business and want to generate more revenue? Increasing your profitability is possible, but it requires strategic planning and streamlining operations.
Here are some of the ways other businesses achieve this goal.
1. Streamline Operations with Fleet Management Software
There’s a lot to stay on top of when it comes to managing your fleet. You have to track mileage and fuel consumption, perform scheduled maintenance and repairs, and keep track of warranties and parts inventory. All of these things negatively impact your profitability when you aren’t using a centralized system. Fleet management software solves all of these (and several other) issues.
Fleet management software can increase profitability for any business in the transportation industry in several ways:
- Tracks Warranties. Never miss a reimbursable repair under warranty with fleet management software. You’ll know exactly what’s covered before your technicians perform the repair themselves.
- Streamlines Vehicle Information. Checking up on gas mileage and fuel costs to spot potential issues is easy with software. No more rummaging through folders tucked away inside filing cabinets.
- Helps You Meet Safety Requirements. Document preventive actions, policies, and accidents to ensure your fleet meets safety requirements.
- Data Collection and Analysis. Improve your overall performance by tracking and analyzing various data.
- Optimize Parts Inventory. See what parts you use most and only keep those in stock.
- Reduce Component Failure. Certain parts tend to wear down after a certain amount of time or miles. Track all of that with fleet management software and prevent unplanned breakdowns.
- By implementing fleet management software, you’ll have a centralized location to track all the important information you need to run your fleet. You’ll save time and money while increasing the efficiency of your fleet operations.
2. Use a Fuel Rewards Program
Unless you’ve switched to an all-electric fleet, you have to buy gas and/or diesel to run your vehicles. Fuel is probably one of your highest expenses, and one way to offset that cost is through fuel rewards programs.
Under some programs, you earn points as you buy gas, and you can redeem them for discounts in the store. Other loyalty programs give you discounts on gas, free showers, reserved parking, free food, and high-speed Wi-Fi.
Whether you have employees or contracted drivers who pay for their own gas, the allure of loyalty programs can help you keep your best drivers. As a company, you might be eligible for some programs that individual drivers can’t access on their own.
Truckers Benefit the Most from These Programs
The average cost to run a truck is around $210k per year, and a large portion of that is fuel. If you run a trucking company, you’ll benefit significantly from a fuel rewards program because you have to buy fuel no matter what. You may as well get some deals for your purchases.
3. Cut Idling Time
For trucking companies, the time a truck spends idling is 100% wasted fuel. Idling burns about 0.8 gallons of fuel per hour, and one long-haul truck spends about 800 hours idling per year, on average. That’s nearly 1,500 gallons of wasted diesel. At $4 per gallon, that’s $6,000 per year going down the drain.
The solution is to get auxiliary power units (APUs) for each truck so the driver can run air conditioning and run small appliances. APUs that run on diesel use about one-third less fuel than idling the truck.
4. Pursue Warranty Reimbursements
Always pursue reimbursement for every vehicle or vehicle part you have under warranty. Even when the amount seems insignificant, remember that it will add up over time. Warranties aren’t the only source of extra cash for your company, so keep that in mind, too. For instance, you might save $300/month with a fuel rewards program and $1,500/year with warranty reimbursements. After ten years, that’s $18,000 saved!
Be Frugal and Intentional
The top two methods for increasing profits are lowering or eliminating expenses, and recovering additional funds through sources like rewards programs and warranty reimbursements. If you want more revenue for your transportation company, look for ways to save on your expenses, and get organized with fleet management software. By streamlining operations, you’ll find more opportunities to save.
