Let me ask you a question: Would you keep working if you didn’t make a profit? Let’s say you have to commute a good distance to work, so you take into consideration the cost of your transportation, the gas costs to run your vehicle, the costs of child care while you’re gone, etc. Say you’ve had medical issues and have medical bills piling up, or your house needs maintenance, a new roof, furnace, etc. What would you do? You would either find ways to cut some of your costs, or you would find ways to earn extra money to cover those costs. Ideally, you’d do both. And when things are going well, you put aside some money to save for when things go south. How we run our personal lives is a lot like how businesses run. They have to find ways to cut costs while increasing revenue. It’s been a trying few years for the trucking industry, but the market is coming back, and it’s time for Marvin Keller to start making money again. Here’s how we’re going to do it.
- Equipment Costs
- Reducing truck idle, including utilizing idle-free systems. This can be accomplished with improved equipment and driver training. MK is always looking for the newest technologies and late-model trucks. Every generation of new trucks comes with new features that increase fuel efficiency. Fuel is the single greatest expenditure MK has, so the smallest improvements account for major savings.
- Operational Improvements
- Increasing customer rates. For the first time in years, customers are amenable to increased rates. While we’re not looking at doubling rates or anything unreasonable, if we’re able to increase 5 lanes we run 5 times a week by only $50, that accounts for a significant amount over time.
- Working on connecting lanes and being strategic about new lanes. Deadhead is a revenue killer; finding ways to get paid to move to our next customer pickup is key to increasing our rate/mile. If we can’t increase lane rates enough to make up for deadhead, we can work on finding connecting loads to each customer pickup to bridge that gap.
- Working with customers to gain drop/hook privileges. Sitting is another way to lose money, and it gives us another opportunity to come up with solutions to improve velocity. By working with existing customers to acquire drop/hook lanes and finding new customers who appreciate our ability to leave drop trailers at their sites, we’re keeping trucks moving, earning more money for the company and more money for you! It’s important to note that just like live-load and unload facilities, drop facilities have expectations of our drivers and our equipment. Always read facility notes in your Drive App or load remarks to ensure you are complying with all safety regulations and common courtesy when dropping and hooking. We have lost drop privileges at some facilities due to driver non-compliance, which affects not just you, but the whole team.
These changes are going to happen; we have to push hard to make improvements and be profitable to move the company forward and there’s no better time than the present. We look forward to everyone embracing these changes for the better and reaping the rewards of that effort. Next week: Truck utilization.
