Now is the time to take cost-cutting measures
By Paul Abelson
I can remember when trucking was as much a lifestyle as a business; maybe more so. Showing off your truck and getting bragging rights at the drivers-only counter meant everything. Chrome and lights and how fast you got here from there seemed to be all that mattered.
In this very difficult economy, their place in the priority list has fallen way behind the simple need to survive. Trucking is, first and foremost, a business, and everything must be evaluated for its impact on the proverbial bottom line.
In simple terms, that’s the line on an accounting statement that identifies either profit or loss. Count up all your revenue and all your expenses. Subtract costs and expenses from income and you show either a positive number or, if expenses are greater than income, a negative one. Profit is positive. Loss is negative.
Some things alter apparent profit or loss. You may evaluate whether to operate under lease or with your own authority. Find out in advance what fees and permits will be covered and which won’t. Know what insurance and benefits are included. Determine in advance what you need covered and, after that, what you need to keep operating. Find out what hold-backs and accruals your company will retain, and what you have to do to get that money.
Even if you choose to stay in your current work situation, there are steps to take to cut costs and increase profits.
Improve aerodynamics. Chrome and lights look great, but if you spend that money on fairings that reduce drag, you’ll save money. Keep your trailer close to the tractor. Air suspensions have virtually eliminated the need to stretch out the truck for a better ride. Reduce gaps and the air will flow more smoothly. Consider cab extenders and belly fairings for the trailer. A great deal of turbulence is created under the trailer around the tandems. The EPA Smartway program recently started recognizing aerodynamic trailers for their contribution to improved fuel economy and reduced emissions.
Spec for the job. If considering leasing or purchasing a new (or used) truck, have the dealer run a computer simulation for the loads and routes you’ll be running most often. Check all the available engines and transmissions. The simulations won’t give you absolute numbers, but they will let you compare performance and fuel economy between different trucks. Consider aerodynamic trucks instead of classic-looking ones. They save money and their recent trade-in value has increased compared to traditionally styled trucks.
Improve your driving habits. Several studies done by large fleets found that regardless of equipment, some drivers consistently get better fuel economy than others, by as much as 35 percent. As an added benefit, the same driving techniques that improve fuel economy — gentle acceleration, driving slower and coasting to exits and stops — also reduce wear and tear, lowering maintenance costs. (For more on fuel economy, see David Kolman’s column on page 14.)
Consider retreaded tires. Retreading technology has improved greatly over the past few decades. Testing of casings is more accurate and application of new treads is more precise. Retreaded tires sold today are durable and reliable, at a reduced cost.
You know your truck. You know your business. Think about what you do, and you’ll come up with many ways to improve your bottom line.