Volvo Trucks Global
Volvo Trucks Global

How to optimize your fleet's productivity

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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:

  • 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 that 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.

Do you want to learn more?

As a fleet owner there are a number of steps you can take today to improve your fleet’s profitability. I have compiled a guide that outlines some of these. Feel free to download.

Download

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