Monday, August 26, 2013

Make More. Work Less.

The Road Dog Network on Sirius/XM radio has a popular program that continues to pushes the message that in order to make money in our industry, you have to work every single day and never sit around.

I have a different take on this.  Yes, the wheels need to turn to make a profit.  Yes, the trailer needs to be loaded.  Yes, the truck needs to be made use of while you are making payments on it, and yes, the business relies on using the truck and trailer to haul freight.

Despite the realities mentioned above, the truck should ONLY be used when there is profit involved.  In business, you need to take into account the daily, weekly, monthly, and annual net income for your hard work.  At the end of the year, your total gross income will be placed alongside the total miles driven and the days away from home.  You want those days away from home to bring in the highest profit possible.  

The market fluctuates and the freight rates rise and fall.  You want to work for as close to the high end of what your services are worth and you want to balance that out with what the job entails.  

A few examples of this in regard to the job's details are:  

Do you have enough time to make the delivery or are you going to have to drive faster than the truck's optimal speed?  Increased speeds decrease your fuel mileage advantage and add to your maintenance costs.

Does the load place your truck in a favorable location to find another load?  deadhead decreases your profit margin.

Is the climate (and by that I mean the actual weather conditions) conducive to the load being delivered safely, damage-free, and on-time?  Delays will eat up your per-days-out profit.  

Is the customer one that will be easy or difficult to work with?  Will you be detained at the shipper/receiver and not be compensated?  Or will you be in and out quickly, allowing you to get back to making money?

If you don't know the answers, then you'll have to ask as many questions as possible to gain a better understanding of the situation.  Over time, this will be learned by rote.  

Drivers who work as cheaply as possible will work harder longer hours and have less income to repair their equipment, put into retirement, and feed their families.  They will also cement their position as a carrier who will work for cheap.  They will continue to be given jobs that pay less, with more physical labor involved.  Cheap freight that breaks your back can be found all day long.  It's abundant and there for the picking for drivers who don't know what they're doing, because the experienced operator will bypass these loads for higher paying, less physically intensive jobs.

As for sitting around - sometimes you just need to do that for a while until the good freight becomes available.  Companies will need goods moved at various levels of importance.  The more important the load, the greater the demand to get it moved.  This typically translates into more pay.  

This is not an opportunity to gouge a customer but rather, an opportunity to give them what they need at the rate you're willing to do it for.  It's age old supply and demand.  You shouldn't be moving the truck every day just to stay busy and short yourself higher income so the truck doesn't sit around collecting dust.  Sometimes a little dust is ok.

Another type of opportunity involves a load that needs to be moved which has such a high rate of pay but involves more physical labor and more wear and tear on your equipment.  A customer will pay exorbitant rates to move freight that ABSOLUTELY MUST BE MOVED, but because of what they're paying, will expect (and deserve) the most professional, competent, and diligent operators money can buy.  Most of the time with this elite freight, the time given to deliver is exactly enough time to make it.  Or less.  

The skills required to accomplish the task will have to be top notch.  This is where the knowledge of your operation is put to the test.  The operator shouldn't be confused with the loading or unloading process, or not have the right equipment needed to complete the task.  The way to get these loads, time and again, is to display you know what you're doing by KNOWING WHAT YOU'RE DOING.  

There are a few exceptions to the rule of booking only high paying freight or waiting for a good load to present itself.  In some cases, maintaining a customer's loyalty, wooing a new customer, or trying to hang onto an existing customer versus losing them to a competitor may warrant taking a load that pays a little less than you'd like.  Overall, the loads you decide to take need to fit the needs of your business.  

The bottom line is to make the most of your time.  Take everything into consideration when deciding which direction to take.  

Make more.  Work less. 

It sounds simple, but some drivers will spend years pursuing this idea only to come out with the short end of the stick. If you do your research and focus on your business, you will succeed.

1 comment:

Scott said... a business, you need to maximize profit.