For my first blog of 2024, and the first on my new website, I want to talk about transport operational costs and how, with the right guidance, support and practices, you can save money. After all, in this industry, who doesn’t want to save money?
Before we get in to it, I shall start with a very brief look back at 2023. What an unprecedented year in transport? Costs rising, rates being reduced and record numbers of hauliers going out of business. It feels like every day is a battle of survival, let alone taking some time to look at operational costs and where savings can be achieved. We seem to be able to forecast and set what the haulage rates will be for a coming year but how often do we set a forecast of what we should or could be saving? Cost saving initiatives tend to be reactive rather than proactive.
There are of course quick and easy wins such as fuel supply deals, managing wage costs where possible and fixing purchase or lease deals. These are the primary costs that tend to have the most focus, being typically the highest operational costs. But what about taking a deep look into the business, where can you save even more money? The Devil is in the detail and often its in the smaller or less frequent elements where some surprising saving can be had.
As mentioned above, cost cutting is often a reaction to a crisis situation but what if you could forecast how much saving you would like to achieve? What if you could link proactive steps and ongoing management across the entire workforce, to achieving real and measurable savings?
Part of the problem is finding the time. As soon as things get busy again….’the good times are here again’…the essential and ongoing interrogation of cost control can be forgotten or at least put aside. And what about spending money to save money. Such a difficult selling point. What if your costs savings were significant enough to have a ‘cost neutral’ investment? Will what you spend yield a greater saving at the end of the year? With proactive and ongoing management, highly likely.
Its not only looking at things once, say the beginning of the year, when its quiet and people are looking for things to do, but regularly keeping an eye on evolving markets, changes of circumstance – having the ability to adapt quickly to ever changing conditions.
How adaptable is your business? Standing fleet costs eat in to profits very quickly and a few damages here or there can quickly make the difference of profit, break even or loss week in, week out.
Do you have strategies in place to manage all of these variables or is the focus on more, more, more? How about less, less, less? Less fuel spend, less vehicle downtime due to damages, less insurance costs?
Risk Management and insurance renewal plays a big part in operational costs. Not only cost of repair but lost productivity of vehicle and sometimes continued wages. Do you have a company wide and proactive risk management process in place? Are you getting the best from your broker? Does your staff take pride in what they do or are damages and losses ‘an occupational hazard’?
Is your fuel performance consistent? Are you getting the best from truck and driver regardless of pump price?
This blog cannot provide all of the answers as every haulage business is different but some basic principles and willingness to look deeper into where your money goes, can be the same. This article is intended to at least raise some interest or prompt some questions to yourself, ‘am I doing everything I can? Are there changes in the sector I am not aware of? Where can I get help to bring this in to focus for my business?’
Of course, if you do need help on how to implement and manage operational costs, you are in the right place. Get in touch, we are here to help you save money.