The future of their own trucking operation is the concern of owner-operators today as fuel prices have headed to the stratosphere and beyond. However, with a bit of effort, fortitude and an ounce or two of tenacity, each O/O can turn this plight into an opportunity for more revenue and greater profits.

To begin, you must have the determination to look at the way you’re currently operating your truck. It is imperative that you decrease the fuel consumption as quickly as possible. An argument can be made that “time is money and miles driven takes time, so the faster I go the more money I can generate.” While this may sound good in theory, in real-world application it doesn’t fly. All it will do is put you into the hammer lane to eventual financial failure.

There is what’s called critical mass. This is when the energy expended exceeds the energy required to accomplish a particular task. In trucker-speak, this means when the cost per gallon of fuel reaches a certain plateau, the fuel required to attain a greater truck speed exceeds the costs required to make a profit. In other words, “Speed Kills Profits.” Dropping your cruising speed between 55 mph and 60 mph will save you thousands of dollars each year.

Add to this a diligent maintenance program with emphasis on cutting resistance and friction: everything from greasing at proper intervals, correctly scheduled oil changes, overhead service; to correct tire pressure and alignment; rear axles, transmission, frame, and suspension maintenance.

As I stated in Driven 4 Profits An Owner/Operator’s Guide to Keeping More of the Money You Earn (by Tim Brady and Esta Klatzkin, E.A. Write Up The Road Publishing, 2003):

“This machine (your truck), like all machines, has maintenance requirements that Will Not Be Denied! If they are ignored, there will be a significant price to pay for that arrogance. The Owner/Operator is the one who is ultimately accountable for the results of the P.M. Schedule Program. The person responsible for ignoring those maintenance requirements is responsible for any subsequent and catastrophic failures that result and the financial consequences.”

This statement is truer today than at any other time in my trucking career. And there are other things you can do to improve your bottom line when it comes to reducing fuel consumption:

1. Cut your idling down.

   The obvious point here is, if you’re not in your truck—turn the engine off.
   Consider a quality arctic sleeping bag, 12v electric blankets, and carry those charcoal/sawdust base 8-hour warming packets.
   Look into installing an APU.
   Investigate any new fuel saving technology.
   Try to not run your truck while you’re sitting inside it when the outside temperature is between 50° and 75°.

2. Shop for your fuel.
   This means way before you need it. If possible, you should go up on to the major truck stop Internet sites each day before you begin driving. See what fuel is costing along your route and plan a purchasing strategy for that day. With the wild up and down fluctuations in fuel prices today, this is necessary. You may need to adjust your plan each day.

3. Choose not necessarily the shortest route but the one with the least number of obstacles that slow you down or stop you along the way (traffic lights, turns, mountains, construction, large cities with near-gridlock, rush hours, etc.).

4. Convince other drivers to conserve their fuel!
   The more people conserving fuel, the lower the price will be due to the laws of supply and demand.

Your tenacity will be shown by willingness to take advantage of the opportunity to increase the freight rates you charge. With the extreme increase in fuel prices and the publicity this has generated, if someone doesn’t know this is going to affect shipping costs, they’re living on a mountain in Tibet. Shippers, receivers, brokers, trucking companies and consumers are expecting this increase. At no other time since deregulation has an opportunity like this presented itself to us.

In order to do all this, we’ve got to go back to the basics. You’ve got to know your costs. In addition, you have to know your daily break-even point. If you are unable to substantiate your need to increase your rates to your customers, they won’t go along with your plan. The only way to do this is by the numbers; your numbers. Your rates must be figured by using your costs, not anyone else’s.

Imagine you walk into your favorite truck service facility for a PM Service. As you amble up to the service desk, the service manager asks you, “What can we do for you?” You reply, "I need a PM service.” He says, “How much would you like to pay?” It’ll never happen, right? Why? Because the truck stop has figured its cost for providing this service, and they know the profit margin needed to stay in business.

Your trucking operation isn’t any different. No one can know your costs except you. Not dispatch, not sales, not the shipper, not the receiver, not the consumer, just you.

So it’s imperative you know what your fixed costs per day, cost per mile, and shipment (load) specific costs are. Then reduce these costs where you can, and know when, where and how much you need to increase your rates to bring in the needed revenue to make a profit.

Remember, it’s your truck, your business.

Timothy D. Brady is a 20 + year trucking veteran, AMSA’s 2002 Super Van Operator HHG, co-author of “Driven 4 Profits,” developer of Load Profit Analysis Software, is the principle consultant for The Trucker’s Consultant Phone Service (866-890-8996). Catch him on Sirius Trucker’s Network’s “Open Road Café,” where he’s “The Trucker’s Business Advisor.” He is also available for speaking engagements. You may contact him at tbrady@writeuptheroad.com or (731) 749-8567 His trucking business books and software can be found at www.truckersbookstore.com

For those who entered our contest last month: Thank you for the tremendous response. One a winner from Pennsboro, WV. Here are the correct answers.

1. What is the most powerful thing a trucker can do to improve their financial position?
   Answer: The knowledge required is understanding the basics of operating a truck as a business; knowing what it costs to own and operate a truck, how much money is needed to cover those costs, how to put enough away to cover the unexpected, and have more than enough left to create a comfortable life for the trucker’s family.
2. What are two reasons that contribute to the loss of drivers by a trucking company besides money?
   Answer: Lack of efficiency in load planning and ignoring costs when determining rates.

   Contest: The first person to answer correctly the questions listed below by email to info@truckersbookstore.com will receive a copy of Quick & Simple Record Keeping for Owner/Operators ©2005 Tim Brady and Esta Klatzkin, E.A.

   1. What are the two areas a trucker shouldn’t ignore?
   2. What opportunity has presented itself with the high cost of fuel?
   
   
   Want to use this article? Click here for options!
   © 2007 Penton Media, Inc.