7 Ways for Trucking Companies to Cut Costs


Jan 19, 2016


More than 3 million drivers, 3 million trucks and 1 million companies together move 9.2 billion tons of freight annually.

Is it any wonder that the American Trucking Association regards the trucking industry as the “lifeblood of the U.S. economy?”

Unfortunately, one of our most significant economic pillars is also writhing under the weight of financial, political, and technological challenges, from labor shortages to stagnant freight prices.

Smaller trucking companies suffer the most. They are constantly on edge, hindered by low budgets, minimal resources, and the persistent threat of having their employees and customers stolen by bigger companies.

So how do you improve your profit margins in such a tumultuous environment?

You can increase shipping rates or loads/deliveries, but these might infuriate your customers and employees respectively.

How about cutting costs instead?

You don’t even have to do anything drastic –  such as restructure your organization –  to notice a marked difference in your bottom line.

Here are seven easy and inexpensive cost-saving tips that you can start implementing today:


Track and Budget

How can you reduce costs if you don’t know where you are losing money?

Carefully analyzing your fixed (e.g., rent, insurance, taxes, equipment, permits) and variable (e.g., fuel, tires, lodging, stationery and meals) operational expenses will unearth the profit-drainers. Focus on slashing variable costs, because fixed costs don’t alter unless there is a drastic change to your operations, such as fleet expansion or business relocation.

Conduct a Profit and Loss (P & L) analysis once every week to quickly find – and correct – any stray numbers. It is highly recommended that you hire a local accountant – or use an inexpensive accounting software – to budget your expenses.

Being smart about allocating and analyzing your finances prevents those sneaky expenses from snowballing over time and hurting your margins.

There is an understated third cost that is often a game-changer: intangible costs. These are psychological and physiological inefficiencies that cannot be found on a Profit and Loss (P & L) statement.

Poor health, poor attitude, and poor communication are all variations of intangible costs that need to be plugged immediately.


Focus on Core Competency

Small business owners despise losing control. But spreading yourself thin across tasks that don’t excite you will only hurt your business’ productivity and profits.

Concentrate on what you do best and outsource the rest.

Subcontracting responsibilities costs money, but the return-on-investments (ROIs) include: reduced stress, enhanced efficiency and smoother day-to-day operations.

Experts recommend forging a relationship with a Professional Employer Organization (PEO) in order to outsource tasks like recruitment, payroll compensation, risk management, and employee benefits.


Expand Employee Skills

On the flip side, should also know what not to outsource. As a general rule, any task that requires direct contact with the customers must be conducted in-house – e.g, lead generation or customer satisfaction surveys. This way, you not only understand how they perceive your company, but will also be able to control your brand message.

Give your employees the time and space to gain additional skills – e.g., social media or business management – in order to perform more tasks in-house. As their knowledge increases, so will their confidence and commitment to assume new responsibilities, which will save expenses in the long run.


Trim Fuel Inefficiencies

Fuel is considered the ‘second largest variable expense (after depreciation)’ faced by trucking companies.

While you have no control over fuel prices, you can, however, improve driving habits, maintenance, and employee-management relationship to cut costs.


Your driving habits directly impact the fuel efficiency of your fleets.

  • Do not accelerate or decelerate quickly because these actions consume more fuel.
  • Do not leave your truck on while at a rest stop. Just 30 minutes of excessive idling after a 100-mile trip can slash your MPG by 33% and wear out your truck faster.
  • Do not have a ‘lead foot.’ Slow down to not only improve fuel economy but to also reduce accidents. Truckinginfo reports that, “On an average, every 1 mph increase in speed results in a 0.14 miles per gallon decrease in fuel economy.”
  • Allow extra time for driving through inclement weather. Work Truck Magazine recommends reducing your speed by one-third and one-half under wet and snowy conditions respectively.
  • Limit how long you warm up your truck (unless you are parked in sub-zero temperatures).
  • Study the traffic and weather conditions before leaving. Smart route planning using Google Maps and GPS devices help you drive intelligently.
  • Do a routine vehicular inspection before and after a trip. Have an itemized list of common issues, and go over them point-by-point.


As a business owner, you can find both tangible and intangible ways to save on fuel costs.

  • Be transparent about your cost-saving measures. Your honesty will stimulate employees to embrace your mission as their own.
  • Get together with your drivers every morning to assess past performances, set future goals, and explain what they can do better. This ‘daily meeting’ will light a fire within them to give their best.
  • Institute monthly rewards for drivers – and dispatch managers – with the best mileages.
  • Request your drivers to brainstorm ideas for saving fuel costs. Have a 24-hour drop box to collect their inputs. They are at the front line of your operations, and will offer some useful and novel perspectives. Implement – and reward – the best ideas.
  • Empower your drivers with the tools of the trade – such as routing technologies, reporting systems, and advanced communication tools.
  • Keep in touch while your drivers are on the road to promptly address any concerns.
  • Freely talk to your employees to uncover challenges that they might not feel brave enough to bring up otherwise.


Timely Maintenance

Do not wait until your engine breaks down or shows obvious wear to conduct maintenance.

Regular preventative maintenance is a lot less expensive – and more effective – than delayed repairs:

  • Test tire alignment. Imbalanced tires hurt fuel efficiency.
  • Make sure your tires are neither underinflated nor overinflated. Work Truck Magazine recommends that drivers carry pocket pressure gauges, along with spare light bulbs, headlamps and fire extinguishers.
  • Check electrical wiring, hoses, belts for fraying or cracking (especially during the cooler months).
  • Clean air filters. Tighten tire valve stems to prevent tire leaks.
  • Carry important contact information in your truck, along with instructions on how to deal with an accident.
  • Do not overload the truck – fuel efficiency reduces with truck weight.
  • Clean your windshield, windows, surfaces of lights and reflective strips to improve your truck’s visibility.


Put Safety First

The U.S. Department of Transportation reports that, in 2012, 333,000 large trucks were involved in traffic crashes, with almost 4000 people being killed.

Unfortunately, injury is common when you are driving for long periods under volatile weather conditions and traffic patterns.

Institute a safety management program to systematically address these issues, reduce accident risk, lower insurance cost, enhance driver productivity and energize their attitude.

Hold seminars for injury prevention, accident reporting, workers’ compensation claims, inclement weather driving, vehicular inspection, and any other area that might impact driver and truck efficiency/safety.

Educating your drivers on the most common dos and don’ts of driving a truck lowers the possibility of them making careless mistakes under pressure.


Remember: Health as Wealth

Truck drivers don’t always eat healthy on the road (burgers and Twinkies, anyone?). Nutrient-less, carb-heavy diets cause mood swings, energy crashes, and the inevitable fatigue that results in both minor and major accidents.

“Driver fatigue should be part of a larger concern with driver health, as lack of energy and burnout could be symptoms of a larger issue with health and wellness and poor health promotion, “ writes Shaan Gandhi for Huffington Post.

Implement health and wellness programs to inform them about the importance of having a balanced meal, moving your body, proper hydration, and good sleep. Hold health screenings and virtual conferences with a nutritional expert. Share useful information about how to eat right and sleep tight while on the move. Encourage them to install meditation, fitness and diet apps on their phones to maintain their motivation.

A healthy employee is a productive employee.


A Mile Starts With an Inch

Hopefully, these simple cost-cutting tips get you headed on the right track towards a more profitable working environment.

Remember: minor tweaks can reap major dividends. Start small, but diligently, and watch your bottom line increase.