BUSINESS PRACTICES FOR TRUCK DRIVING
It is challenging to be aware of every aspect of the trucking industry in a world where success is measured in terms of capacity, mileages, utilization rates, rates, revenue realizations and losses, expenses per mile, profits and losses, & return on investments. You have been working so hard in your studies to enter this world. Your mission in this world is to manage a secure and successful business while attempting to create order out of chaos. And you believed that all you would do was go out and drive a truck!
Whether you are a company driver, a one-truck owner/operator, or an entrepreneur looking to expand your trucking business, we will just touch on a few of the many business concepts and ideas that you need to be aware of to operate a profitable trucking business in this last chapter.
Cost Determination and Control
The biggest challenge you will face as a transportation professional is cost. Any truck driver might lose money due to excessive expenditures or a lack of a strong cost management strategy.
As a business person, one of the first things to realize is that not all expenses are undesirable. Some expenses serve as investments that lower costs in other areas. The desire to save money often causes rookie and experienced drivers alike to lose money. Just keep in mind that although you are in this company to make money, it does not matter how much you earn if you spend it all before you get home.
Equipment purchases are one example of this. Costs associated with newer equipment may be high, both in terms of monthly and per-mile costs. However, modern equipment needs less maintenance, performs better (fuel economy, oil consumption, etc.), has less downtime, and improves driver satisfaction.
When seen alone, buying a new car may seem like an unnecessary investment, but when other considerations are taken into account, the cost picture changes.
As a business person, you need to be aware of the two primary types of expenses: rolling (or variable) costs and fixed costs.
Rolling costs — also known as variable costs, are challenging to forecast because they are always changing. These expenditures are sometimes budgeted as an "estimate" or a generalization of what they will be. Rolling expenses might play a significant role in your choice when deciding where to operate and what kind of freight you wish to convey.
Rolling costs included items like: Your pay, Fuel, Tires, Road tax, Tolls & Scale fees, Vehicle depreciation, Loading and Unloading fees, Fines, Accidents and claims.
This list demonstrates that several rolling expenditures might consume a significant percentage of your earnings. Your ability to manage these expenses will directly affect both your performance as a truck driver and as a successful businessperson.
Fixed costs — are costs that can be budgeted for and that remain constant throughout time. They have established charges that remain constant regardless of how far you go or how long you spend at home. This is crucial to keep in mind since these expenses will persist even if you decide to go on vacation or just stop driving for a month.
Fixed costs include:
Facility rent or mortgage (if you have one)
Professional services (legal, accounting, etc)
Professional dues and subscriptions
Due to their consistency and constancy, fixed expenses are the simplest to "see." Both positive and negative effects may result from this. If you have the drive to succeed and are aware of the dedication required to become a successful trucking professional, your fixed expenses will just serve as a starting point for the monthly income you must generate. Your fixed expenses will consume you if you are more of a "hobby trucker" and are just doing this for attention.
So which is it? Before enrolling in this course, I think you decided if you wanted to be a professional truck driver, but only you can be sure of that.
One of the biggest expenses you will have as a truck driver is a fuel. It is crucial to comprehend how gasoline and fuel economy tactics might impact your bottom line, even if you do not own your vehicle.
Driver habits and performance — One of the biggest influences on fuel economy. The driver's driving style may have an impact on the fuel economy of up to one mile per gallon.
The following list of driving methods will help you get better gas mileage:
Low RPM driving
Operating at a slower speed
For their company drivers, several businesses already provide gasoline incentive schemes. By following some of the advice you learned in this course on safe driving practices, you as a corporate driver might earn thousands of dollars more thanks to this incentive. As an owner/operator, you should be aware that practicing safe driving habits has allowed you to save hundreds of dollars each month on gasoline expenditures. This is your "fuel bonus program." Spending less on gasoline means having more money in your pocket, regardless of whether you are a business driver or owner/operator. We are not just talking a few bucks a week here; annual gasoline savings may reach hundreds of dollars!
The driver controls the income, whether you are paid by the mile, the trip, or the hour. The amount of work you want to perform and the amount of work you want to hire people to do for you directly affect how much money you earn.
You could believe that you have little influence over your pay as a business driver or even as an owner/operator. This is untrue. While you may not be able to change your pay per mile as often as you would want, you can still have control over how many miles you run, how you run those miles, what "extra" activities you will do to earn more money, and how you plan your vacation time.
As we previously discussed, the initial motivation behind your income generation should be your costs—specifically, how much you must generate to break even. Additionally, you should have an idea of how much you need or desire to achieve a respectable level of life for yourself and your family. With this in mind, you can now calculate the amount of income required to meet these benchmarks and adjust your operations appropriately.
How you operate your vehicle as an owner/operator impacts your financial situation. Recall those fixed expenses? They remain the same regardless of how much you drive each month. Try jogging more kilometers this month than you did last month if you want to generate a greater net income (what is in your pocket at the end of the month). Your gross income will rise but not the fixed expenses. This generates more income for you.
Why do you do this? Run wisely rather than forcefully. Plan and decide where it makes the most sense to operate depending on the availability of freight. Even while you would like to travel to Southern California on every trip, it would not make commercial sense to spend three days waiting for a reload there. Spend your three days at home and schedule your vacations based on where the freight travels. Increased revenue might be realized in the long run without compromising personal time.
Although you may not be able to choose where you run as a corporate driver, you can choose alternative sources of income. Do you hire a lumper to "driver unload" for you, or do you do it yourself? This can be a method for you to put hundreds of dollars more every month in your pocket, depending on the sort of freight you transport and the rules of your firm. Furthermore, it is a beneficial workout! Additionally, keep in mind that you entered this company to earn money to support your family and yourself. You should be aware that the more money you earn while traveling, the longer you remain out there.
Only a handful of the business ideas related to becoming a company driver and/or owner/operator were covered in this chapter. The principles of expenses and income are the most crucial for you to understand, even if there are many additional business concepts and procedures that are much too many to describe in this text.
As a professional in the transportation sector, everything you do in the future will be tied to a cost or a profit. You may be very successful and earn an income that you would not have been able to achieve if you approach your truck driving career as a business rather than as a job.
You will hear a lot of tales from truck drivers about failure, loss of money, and suffering. Yes, just as in any other field, it may occur in the trucking industry. You are not that. You are a professional who enrolled in this program to get knowledge on how to operate a truck successfully. Knowing how to physically operate a huge truck moving down the road is just one aspect of accomplishment; another is realizing that you are doing what you love and being paid well to do it!
Learn to drive a truck professionally, but also how to run a company professionally. You will live a life that many people only dream of, which will make all of your education seem worthwhile.