Many haulage companies struggle with low profit margins. Razor-sharp competition and increasing fuel costs are some of the reasons for this. Even when demand is high it’s still a jigsaw puzzle to optimize the operations and see a profit at the bottom line. But there are measures that can be taken.
The Swedish trade organization for the trucking business, Svenska Åkeriföreningen, recently conducted a survey among its members regarding profit margins in the transport industry. They found an average profit of 2% for long-haul operations and 4% in the construction field. Both very low margins compared to other industries. The Small Business barometer for 2018 indicated that the transport business was the only sector where profitability went down that year.
Productivity in the transport industry can be defined as cost per ton-kilometer. So, to become profitable you have to keep that figure down and the invoicing up.
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, turns out to be a great money-saver in the long run. Some examples include investing in a fleet management system.
There are also noteworthy exceptions from low profitability – some haulage companies have profit margins reaching 15 per cent or more. There are different reasons why these companies perform so much better, for instance:
In order to work with constant improvements of your business, you need the right tools and information. I’m convinced …
Aerodynamics play a crucial role when it comes to fuel consumption, which in turn has a huge impact on the …