Six Things Transportation Companies Can Do To Keep Prices Down
To remain competitive in today’s economy, transportation companies need to make efficiency central to their company culture, and do everything possible to encourage a resource-efficient mindset among their staff.
Workplace culture is the place to start. Fostering an environment of communication, teamwork, discipline, enthusiasm, leadership and drive can make the difference between an efficient, competitive, profitable company and one that fails.
Here are some proven, internal strategies freight companies can pursue to make a difference to the bottom line, and the customers’ price tag.
- Proactive Maintenance
The average cost of a road call is $450. Many of these can be avoided by strict adherence to pre-trip and post-trip inspections to snag potential problems that could cause breakdowns. It is far less costly to carry out repairs in home shops than on the road.
The savings a freight company can realize through regular, proactive maintenance can be substantial. Besides regular inspections, maintenance efficiencies are realized in staff scheduling, taking advantage of warrantees, and managing the shop.
- Safety and Training
Accidents and product handling incidents can cost a transportation company thousands of dollars per year, not only for the lost time or goods, but also by creating costly follow-up work. Many of these incidents are preventable with on-going safety and handling training.
Think about it: backing into a milk house; spilling gas; using the wrong pin code at loading; ramming a trailer under a low bridge; sticking a tow motor fork into a pallet – whether the consequences are large or small, all of these incidents can be avoided with a little extra attention and care.
Transportation companies need to enact training programs and procedures to keep the cost of shipping freight down. Employees must strive for discipline by following procedures and completing all training. Trainers, in turn, need to confirm that trainees are qualified and well prepared. In addition, the company must continue to improve training procedures, and keep developing training goals.
- Minding The Miles per Gallon
Shut the truck off. It’s as simple as that.
Idling the engine costs money, and this unnecessary expense needs to be controlled. It wastes fuel, increases maintenance costs and shortens the life of the engine, as well as contributing to pollution. Substantial savings can be met just by reducing excess idling. A truck with 50 percent idle time has an idle cost of $2,325 per year. Cutting that idling time in half, therefore, would save $1162.50 per year.
Multiplying that by the number of trucks at the terminal can be a big number.
Progressive shifting, finding the engine sweet spot for torque, resisting the urge to over rev and understanding engine technology will help drivers to achieve the maximum miles per gallon.
- Reducing Driver Turnover
Reducing driver turnover can save a transportation company hundreds of thousands of dollars per year. Costs that are incurred each time a new driver is hired include advertising for the post, recruiting, processing of applications, interviewing, orientation, Smith system training, and getting drivers qualified for loading cards or specific industry licenses and permits.
While compensation, benefits and working conditions are essential for employee retention, positive relationships and healthy communication is proven to impact retention rates as well. In the transportation industry it’s essential to foster positive communication between drivers, dispatchers, supervisors and managers so that drivers feel well integrated and well supported. These bottom line savings can be passed on to the consumer.
- Productive, Positive Culture
At Wadhams it’s important to cultivate among employees a culture that puts the customer first, respects and wants to help one another, and “pays it forward.” This attitude builds upon itself and becomes infectious, resulting in a strong, productive and positive culture that customers recognize and choose to be part of by hiring the company to be their carrier of choice.
This positive workplace culture transforms a good team into a great team.
- Strong Customer Relationships
In order to remain competitive and deliver referable service, customer service representatives need to stay in contact with existing customers. Building relationships and listening to a customer’s needs is more than good manners – its good business, too. It provides insight into the needs of the client, allowing you to provide the product or service in demand.
Companies that abide by these six strategies will find they are able to keep prices lower than their competitors and are able to pass those savings on to their customers. Small measures add up.