Volvo Trucks Global
Volvo Trucks Global

Have you optimized your operations?

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Productivity in the transport industry can be defined as cost per ton-kilometer. So, to become profitable you simply have to keep that figure down and the invoicing up? Sounds easy enough? But it isn’t always that easy. 

Many factors affect profitability in the trucking business. And in one way or another, most of them are related to fuel consumption.  

The Swedish trade organization for the trucking business, Svenska Åkeriföreningen, recently made a survey among its members regarding profit margins in the transport industry. They found that long haul operations make an average profit of two percent while trucking firms in the construction field currently make about four percent. Both very low margins when you compare to other business areas, so for most trucking companies it’s a constant challenge to stay profitable.

There are exceptions of course. Some firms have profit margins reaching 15 percent or more. There are a multitude of reasons why these companies perform so much better, for instance:

  • They have claimed a niche market where there are few competitors.
  • They provide a service where they can avoid competing solely on the basis of price. That includes for instance green business or a focus on transports where the timing is critical
  • They have well worked through operational setup and avoid empty runs, even to the extent they do not take on a transportation task if they cannot get a return transport.
  • They have digitalized their business and are even on a daily basis able to monitor the performance of their operation down to cost and revenue per individual truck.

Optimizing your operations may seem like a jigsaw puzzle where it can be a challenge to see how all the pieces should fit together. Some parameters may seem obvious, such as filling up the cargo spaces as much as possible and minimizing the “empty kilometers”. But factors such as the use of digitalization, the age of your truck fleet and the drivers’ skills also have a great impact on your productivity.

In many cases, what seems like a cost initially, can turn out to be a great money-saver in the long run.

 

Do you want to learn more?

Feel free to download my guide on how to optimize your operations. I hope you find it useful.

Download

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