Similar to other business operations, running your own trucking company comes with a plethora of responsibilities. From handling your finances to supporting your employees, you have your work cut out for you every single day.
But unlike many other sectors, running a trucking business also has some distinct aspects to it. Fleet management, cash flow problems and an abundance of paperwork are just a few of the segments that make these operations more challenging than a run of the mill business.
This calls for a well-planned approach and fail-safe management for every trucking operation. Thankfully, pulling off this feat isn’t as difficult as it may seem at first. With judicious measures and careful strategies, you can support and grow your trucking business consistently.
To see how all of this works in the real world, here’s a lowdown on managing your trucking business with efficiency, growth, and quality of services in mind.
Freight Factoring Can Help You Get Paid Instantly
Through freight factoring, you can sell an unfulfilled BOL to third party invoicing firms. This allows you to get paid for your work ahead of the invoice’s due date.
When you sell your invoices to a factoring firm, the company typically pays you 80-90 percent of your total amount due right away. The rest of the amount is transferred to your trucking business when your actual client pays off the invoice.
As a result, this freight factoring mechanism allows you to get cash payments against your unpaid invoices without having to wait a long time. This lets you benefit from proper cash flow without running into problems of insufficient capital.
Improve the Efficiency and Maintenance of Your Fleet
As the heart and soul of your operation, your fleet is one of the most critical segments of your overall business. That’s why one of the first aspects of running a trucking business comes in the form of fleet management.
While being a highly detailed section of a trucking business, fleet management is also relatively straightforward to handle when you know what you are doing. You need to be mindful of a few aspects that directly relate to taking care of your fleet.
Build a Fleet That Speaks to Your Niche
Building your fleet depends upon a lot of factors. But it mostly speaks to the needs of your chosen industry.
For instance, if you work as a hotshot trucking business, your fleet can do with a few pickup trucks. However, if you carry larger loads, you need to have proper semi-trucks in place. The type of cargo you deal in also influences this requirement.
When you continue building and expanding your fleet according to the clients you want to serve, it helps you manage and grow your operations in the right subsector. This makes sure that your capital and efforts return an optimal return on investment (ROI).
Take Care of Your Fleet Through Preventative Maintenance
Maintaining your fleet is a critical requirement by the Federal Motor Carrier Safety Administration (FMCSA). It is also a highly beneficial practice that prevents costly repairs and equipment failure during your deliveries.
Keeping this in mind, it is essential that you consistently maintain your fleet on the road. That’s where preventative maintenance (PM) programs come in.
These inspection and PM programs are designed to take care of frequent checks on aspects inducing but not limited to truck health, auto fluid levels, and vehicle alignment. You can follow the PM schedule and coordinate with reliable mechanics to ensure that your fleet is in optimal shape.
Don’t Be Shy of Making Repeated Investments
Apart from inspection and PM, you may also need to replace certain parts of the trucks in your fleet. This particular requirement presents itself on an ongoing basis and generally applies to all logistics providers.
This means that you need to keep an open mind on investing in new components for your trucks once the older parts have been utilized to their capacity. While this investment comes at a significant expense for larger fleets, it keeps your operations running while keeping common problems at bay.
By keeping this requirement in mind, you can steer clear of sudden vehicle breakdowns and related issues. It also helps your drivers stay safe on the road.
Look Into Factoring Services vs. Self-managing Invoicing
To fund fleet management requirements, employee expenses, and overhead expenditure, you need to make sure that you have proper cash flow at hand. But in an industry where your invoices can take 30-90 days to get fulfilled, it’s common to run into problems in this regard.
That’s where freight invoice factoring can help. By looking into this mechanism, you can stay away from the problems of self-managing invoicing. As a result, you can maintain a consistent cash flow for your business and its requirements.
Self-managing Invoicing Can Cause a World of Problems
Self-managing invoicing leaves the fulfillment of bills of lading (BOLs) to the due date. Since these due dates can range anywhere from a month to three months, this can create a world of issues for your trucking business.
Even when you are technically paid on time, this significant period between the delivery of your cargo and the fulfillment of your receivables can present challenges in maintaining your cash flow. Until you have cash in hand, you need to pay for your costs out of pocket. When you get the payment, it goes into managing your previous expenditure.
No matter the scale of your business, this particular problem can often hinder your progress and growth. This is especially true if you are short on capital.
You Need to Pay a Small Fee in Return for Invoice Factoring
Freight factoring requires you to pay a small fee to the invoice factoring company. But it often remains justifiable, especially when you compare its direct benefits to your business.
As compared to loans and other lending mechanisms, invoice factoring is a relatively easy and cheaper way to get an advance on your earnings. It is also faster than many different methods to acquire capital, such as seeking investments to grow your company.
For these reasons, invoice factoring has become a highly popular way for trucking businesses to scale their operations. When handled responsibly, it can act as a critical support tool to manage your activities.
Digitize Your Basic Operations to Optimize Your Processes
Dealing with paperwork such as delivery statistics and performance records is an everyday activity in the trucking industry. But unlike many other sectors, your business’ very well being hinged on the management of these details.
In an era of digitization where all necessary details are managed and stored electronically, improving your analog operations seems like a natural step. It also comes with real-world benefits, which can help you scale your trucking business with ideal efficiency to boot.
Bring Your Delivery Documents to the Current Era
In traditional capacities, BOLs and invoices come with a long trail of additional paperwork. This makes them complicated to handle and adds redundant steps in their submission and fulfillment.
This particular method adds more time to execute, handle, and complete related tasks. It can delay your critical transactions that are important for your performance and cash flow from delivery confirmations to payment transfers.
This is why looking into digitizing your BOLs, and relevant documents is crucial to managing your trucking business more efficiently. Fortunately, you can find these solutions through reliable vendors. These programs only take a few days or weeks to be fully integrated within your operations based upon your requirements and scale.
Look Into Telematics for Accurate Performance Statistics
As a highly utilized combination of telecommunication and computer systems, telematics has become critical to commercial fleets’ overall operations. Whether you are managing interstate deliveries or intercity loads, using this system can help improve your trucking business’s general management.
The latest trucking equipment and vehicles come pre-equipped with telematics. This means that you don’t have to go far and beyond to utilize the technology in your operation. You need to know how to use the data to your full advantage.
By looking into aspects such as GPS tracking, maintenance issues, and performance levels, you can use telematics to keep tabs on your overall fleet. Using these statistics with a fleet management software helps you obtain full control over your operations.
Use Fleet Management Software to Stay on Top of Updates
Speaking of fleet management software, this particular tool can serve as the backbone of your trucking operations. Whether you are using it as a way to track your fleet’s delivery or its maintenance, it can help you stay updated on your vehicle operations to their last detail.
This goes beyond checking the records of your vehicles’ last inspection or PM visit. When appropriately used, telematics can help you get data such as fuel management, driving speed, and acceleration and braking patterns.
As a result, you can get deep insights from your fleet performance and activity. Using this in-depth view, you can easily optimize your operation by paying attention to its different pressure points.
From getting paid on time to improving your fleet’s performance, these mechanisms can help you manage your trucking operations in a better manner. When you deploy these suggestions with a strategic approach, they can go a long way towards scaling your business.