Weathering Tough Times In The Trucking Industry

Merry Christmas & Happy New Year!

As we close out 2008 with the holiday season, and look forward to the challenges of 2009, we have much to consider. Everywhere you look there is another trucking article or blog discussing the difficulties the trucking industry has gone through the last year, and the gloomy outlook for 2009. Although interest rates and fuel prices continue to slide, just about everyone seems to believe they are both going to go back up significantly in the months to come. Freight rates have fallen, as has freight volume in general. There have been a significant number of trucking companies that have gone out of business or laid people off. Even one of the largest truck stop chains filed for bankruptcy protection this week. Plenty of gloom and doom to go around.

Any professional athlete will tell you that if they are in a slump, the key to getting back to the top of their game is a return to the fundamentals. They go back to the very basics of their sport regardless of the level they are playing at and start there. That's because the fundamentals are the foundation that everything else is built upon. Currently the trucking industry over-all is in a slump, and this is a good time for us all to focus on our fundamental business practices.

Question Everything

When times are tough and the bottom line is thin, eliminating waste anywhere it is found is crucial. When you take the time and effort to evaluate your business practices you can often find hours of wasted time and duplication.

For instance, run through the life cycle of a shipment at your company. From the time the shipment is accepted, until the time the money is received for hauling the load and the driver is paid. Analyze each step meticulously, questioning each process for necessity and possible duplication of effort. Look for "holding patterns" where critical information may be caught, stopped, or lost, and see if there isn't a more stream-lined way of processing the data. Quite often, especially in companies that have either experienced growth or downsizing, there are processes being followed by personnel that have no idea why they are doing it. A process has just always been done that way so they continue, potentially wasting time and resources that could be redirected to better use.

When we install trucking software, one of the side benefits is a re-evaluation of the company's business processes. You would be amazed at what we occasionally find.

Once at a forty truck company we found two people filing the exact same information. They literally had dozens of file cabinets and more on order, filled with duplicated copies of freight bills. They had been doing it for years and never realized they were duplicating work for no reason. Something so simple and yet it was overlooked because noone bothered to analyze their business processes.

At another company, freight invoices were being held up for over two weeks for a freight auditing process that was not even taking place. The company had made a change in the way their loads were rated, removing the need for the freight audit process, but had failed to let the billing clerk know. This had gone on for a couple years.

Another instance occurred at a fairly large company that ran a regional operation. When we installed our trucking software we found that drivers were being paid hourly, but the log hours didn't come close to the amount of time for which they were being paid. In the end we found that over ten years prior the drivers had been provided standard block times for their regular routes. The drivers were filling out their pay sheets using these ten year old block times, despite the fact that new roads had been completed in that ten year period cutting transit times in half or more.

All of these companies had excellent people working for them, and each of these companies ran profitable operations. All of the people doing the work were simply doing what they had been told to do. However the environment around them changed and they failed to change with it because no one took the time to evaluate their business practices.

Prepare For Better Times

The second reason to evaluate your fundamental practices is so that you are prepared for the inevitable turn around in the economy. When everything is again running smoothly, you can quickly take advantage of the opportunities that will come available without having to worry about how things will be managed. Your fundamentals will be in place and rehearsed, so you and your team know exactly how to expand your business profitably.

One of the best ways to streamline your trucking business and improve your fundamental business practices is with a good, complete, integrated trucking software solution. In sales, I hear clients frequently say that they need to wait until they are busier before they can afford to get software. But truly that's a little backwards. It is before you are busy that you need to install trucking software and improve your business practices so that when you are busy there is less waste, confusion, duplication of effort, and you keep more of the money you earn.

When the economy turns around, the businesses with the tools, practices, and people in place are the ones that will experience sustainable profitable growth. Those who don't might benefit initially but if they can not profitably manage their businesses they won't benefit long term.

No doubt 2009 will be a long difficult road, it only makes sense that we invest the time and resources in our businesses now to ensure they are fine tuned and running at optimum efficiency.

Contact TruckMaster today, we can help you ensure your team is working with the very best tools in the industry, so that when the opportunities arise, as they will, you and your team will be ready.

Kurtis Brown
VP Sales
TruckMaster Logistics Systems, Inc
TruckMaster Your Trucking Company™