Many company owners I speak with want to pick and pack logistics, but they report that each time they try, things just don’t come together well and they have to scale back again.
The following problems are also reported:
- Customer failures
- Communication problems with drivers
- Lack of quality freight
- Lack of quality drivers
- Staff shortages
A lot of smaller fleets, from 25 – 40 trucks, can be very successful. Fleets between 50 – 80 trucks will traditionally lose a lot of money, but fleets at 100 trucks are again profitable. Why is this? Well, the best answer is that the infrastructure required to run a 60 truck fleet, can also handle a 100 truck fleet. However, 60 trucks can not support the overhead cost. By the way, if you’re working in a trucking company, consider visiting brandon foster tulsa site for a better paying job and better career. Along with other issues, such as lack of quality freight. To grow, the company will need a diversity of customers.
No one customer should represent more than 20% of your revenue because losing that customer would devastate your company.
Also, be worried if upon reviewing your top 10 customers, most of them are ‘logistic companies’ aka brokers! If brokers are among your top customers, you are leaving money on the table and those broker are picking up that money. You need direct customers to stabilize your sources of revenue.
You will need to do a lot of research. Identify your lanes! Most companies have good outbound freight, but the backhaul is their challenge. Identify the area you need backhauls. Look for companies in that area that have freight that suits your equipment type. Research all you can, but in the end, you may have to do a lot of cold calls. Many companies will have a bidding process that is open only once a year. So for quality customers, this will be an ongoing process of selling. Never stop selling. Focus in on the business that you can do well.
Remember you can’t be all things to all people, so prepare your self to say no to some.
There are two major factors when you bid for new lanes. One is that all is market driven. You will have to be in the current market range to compete. Everyone is looking for a bargain, but cutting your rates too deep will not serve your company well or your customer. Be competitive, but be sure your rates provide the profit needed to continue to grow your company.
To avoid the customer failures and driver failures, you need a good system. There are plenty of GPS fleet tracking solutions that you can employ that will provide the monitoring capabilities that you will require to make sure your fleet is running on schedule, as well as counteract any delays. It will allow you to watch your team so that you can discuss with them if they should be doing things differently before repercussions of not doing things according to your company procedures arise. You need a solid internal structure with good processes to avoid ‘dropping the ball’. As you incorporate more people into your team, they need to learn your procedures. Too many smaller companies do not take enough time with new employees. The end result is these new employees end up defining their own job and do not meld into the existing team. The lack of cohesion creates the failures.
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Better customers and better staff will result in better drivers!