How to Find and Avoid Trucking Expenses That are Destroying Your Profit?

how to avoid trucking expenses

The trucking business is a great way of increasing profit but you will face trucking expenses challenge. You need to find, decrease and avoid costs.

Most of the owners are not, which is why it is difficult for small transportation companies.

Businesses have been proven to be tricky, especially when it comes to costs. Regarding this, one profit mistake and you might break your trucking company.

Continually, there are trucking companies who tried to increase their revenue but have strongly failed in the attempt.

There are trucking companies that destroyed their profit simply because they did not make detailed trucking expenses calculations.

In addition to this, there are statistics which show that 250 trucking companies have faced financial stagnation in a year by the end of 2017.

Out of those 250 companies, 5.2 % experienced revenue decrease and 3.4 % revenue decrease for motor vehicles.

The unmanaged profit of these trucking businesses is due to the changes caused in the trucking industry as well as economy fall.

What are The Biggest Trucking Expenses When Running a Business?

To begin with, there are more than 3 million truck drivers, 3 million trucks and 1 million transportation companies in the US.

Additionally, there are 9 tons of freight on an annual basis.

To put it in a different way, that is 70% of the freight in America, transported with the help of trucks.

trucking expenses vs profits and earnings

Considering all the factors involved in the industry, starting or running a trucking business needs a hard work and dedication.

Moreover, the industry requires a wide knowledge of the following:

Without the equipment, the company’s initial expenses would be varying from $6,000 to $15,000.

trucking expenses monthly and daily

In particular, the costs of starting or running a transportation business would be the following:

  • Registration Documents – 900$ to $1,500
  • Insurance Payment – $2000 to $4,800
  • IRP – $500 to $3,000
  • Heavy Vehicle Tax – $100 to $550

To continue with, the cost requirement for trucking companies is huge. To be honest, one of the industries that involve the biggest business and company costs is definitely the trucking industry.

trucking expenses in a company

Additionally, down below are mentioned the total trucking expenses that are inevitable for a trucking company:

1. Extra Miles
2. Profit and Cash Flow
3. Cost Per Mile
4. Fleet Trucking Expenses
5. Insurance
6. Fuel Trucking Expenses


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Reading this, you have already made the first step – you have found the trucking expenses that actually leak out of your profit.

The rest of the work to be done is to figure out the following: “Why am I making deadly profit mistakes, and in which way”?

Furthermore, discover what it takes in order to change, improve and avoid the expense problems in your company.

1. Not Cutting On Extra Miles

Have you ever faced with out of route trucking expenses?

Normally, the start-ups or small transportation companies face this.

Continually, they provide unnecessary mileage which not only soaks the routing time but also increases the trucking costs.

Having said this, there are trucking companies which haul OTR (over the road) for example, and they have many places to visit.

trucking expenses and cutting on extra miles

For instance, if a truck driver has a starting route from state A and the ending route is state B in order to get there, he needs to make a lot of stops.

Consequently, visiting truck amenities sometimes means having to go out of the route in order to get a proper and safe rest and then going back on the road that actually leads to the end of the route.

Correspondingly, the profit mistakes that you are actually making here would be translated into fuel trucking expenses as well.

How To Avoid

One of the most practical solutions to avoid extra miles trucking expenses would be the involvement of technology and use of tech tools in the industry.

Particularly, taking advantage of the interconnectivity of the modern business communication is the most effective and easiest way to get in touch with a particular person, learn or get informed about a specific matter.

trucking expenses result of extra miles

To put it in a different way, you could use the latest technology equipment in order to improve the proficiency of the drivers.

Furthermore, using the newest technology GPS trackers is the latest innovation in the trucking industry.

Continually, there are the telematics solutions as well. Having said this, there are the two essential truck part accessories of today which are beneficial for improving your delivery efficiency.

2. Not Paying Attention To Profit and Cash Flow

No matter how great your business idea or model is, the profit you make or how many investors support your business, the company cannot survive without cash flow management.

In addition to this, there are studies which show that small transportation companies fail to the poor management of cash flow.

When it comes to cash flow trucking expense, your brilliance does not count.

trucking expenses and regulating cash flow

The key is to manage costs in order to avoid putting your profit in unavoidable danger.

In particular, there are reasons why you fail to manage your cash flow. Continually, here are the results of the research:

  • Overestimating the volumes of future sales
  • Impulsive spending during the company’s startup phase
  • Not collecting clients’ payments on time

Having said this, the issues with cash flow are one of the biggest among the companies. Furthermore, reining in constant and unnecessary spending keeps you away from the potential business success.

How To Avoid

When it comes to spending money, you need to know that the balance is key, especially when it comes to small transportation companies.

What happens if you run out of cash?

Your trucking business is then led to bankruptcy.

Having said this, you need to always be prepared for the unexpected trucking costs as well as stay alert to the possible pitfalls.



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