5 Key Strategies to Maximize Profits and Stay Ahead in the Trucking Industry
Trucking companies are expected to face lower margins due to rising labor, insurance, and equipment prices in the trucking industry. However, Vineyard Brokerage suggests that cost-cutting measures without a forward-looking plan can be a recipe for disaster. Thus, a strategic cost-leadership plan is necessary for trucking companies to win and safeguard profits in the current macro-economic environment. Here are five key strategies:
Act early
Trucking companies should be ready to make necessary cost-cutting measures as soon as possible. Waiting too long to make the cuts can lead to deeper cuts in the future, which can have a more significant impact on the company’s bottom line.
Expand the supplier base
Diversifying competition among suppliers can control prices. Having a procurement function that provides best-cost options for all supplier categories is critical. Companies can also benefit from diversifying their supplier base for equipment and services alike.
Gather information
Access to expert analysis, employee insight, and third-party market research can provide valuable insights and intelligence that better prepare the company for future economic headwinds. Front-line employees can suggest creative ways to reduce costs, while third-party market research firms can provide valuable insights into macro-economic factors that directly impact the company’s costs.
Invest in technology
Investing in technology, such as artificial intelligence and machine learning capabilities, can optimize costs for the long term. Route-optimization technology and real-time labor management tools are critical in reducing costs. The integration of AI and machine learning across operations can result in reduced miles and cost per stop, which can significantly impact the company’s bottom line.
Keep finance partners close
A good finance partner will keep companies in check and warn them of headwinds before they turn into a storm. Ensuring cost-cutting decisions are well-informed requires an ongoing partnership with the finance function. Working closely with finance partners can help companies navigate economic headwinds and set themselves up for long-term success.
Investing in a cost-leadership strategy may require a heavy lift in the short term, but it is one of the best ways to set up trucking businesses to navigate any type of economic environment successfully. Implementing these strategies can provide a competitive edge in attracting future talent, investors, and customers, and protect businesses facing economic headwinds.
