2024 has brought a mix of challenges and opportunities for trucking companies across the nation. From economic uncertainty to rising fuel costs to cautious optimism in the coming months, there’s a lot to think about as a fleet owner or broker.
The end of the year is right around the corner and there’s no better way to end 2024 than by setting some powerful short term goals to carry you through Q4. Here, we share some short term goals you could consider for your trucking company and provide some actionable steps to progress towards them. Here’s to a great end-of-year rally!
1. Optimize Your Freight Pricing to Maximize Revenue
The goal: Conduct a pricing review to ensure alignment with market trends and close Q4 with improved margins.
A great end-of-year goal to set your sights on is to optimize your freight pricing to maximize revenue. We’ve seen freight pricing trends go up and down and just recently, some companies have even secured rate increases. For example, XPO negotiated an 8% rate increase from a year ago and ArcBest finished Q2 with a 5.1% increase in rates. With this in mind, optimizing your freight pricing strategy should be a top priority for the rest of the year.
But optimizing freight pricing is easier said than done, right? Start by conducting a comprehensive review of your current pricing strategies to ensure that they align with current market conditions. Then, look at where you can renegotiate contracts or shift your focus to higher paying lanes.
Another option is to implement dynamic pricing models, especially as we approach the busy holiday season. Dynamic pricing models allow you to create freight pricing that adjusts as the market changes.
Actionable steps
- Review and adjust pricing strategies
- Renegotiate contracts or focus on higher paying lanes
- Implement dynamic pricing models
2. Conduct an End-of-Year Financial Review and Optimize Cash Flow
The goal: Reduce Days Sales Outstanding by 10-15 days by streamlining invoicing processes and conducting a comprehensive financial review by end of Q4.
Effective cash flow management is essential for any successful trucking company, especially at year-end when costs can rise, and cash can become tight. To set your business up for success in 2025, conduct a thorough end-of-year financial review focusing on cash flow, outstanding receivables, and areas for improvement. Proper financial planning for brokers and fleet managers is crucial to sustain growth and maintain financial stability.
During your review, identify opportunities to reduce the time it takes to get paid. This may involve tightening up invoicing processes, implementing quick-pay discounts, or leveraging technology to send accurate invoices promptly. If your review indicates that reducing DSO could significantly improve liquidity, consider partnering with a factoring service to get paid on invoices immediately.
At Denim, we offer a number of benefits outside of just factoring. Our solutions include customized financial reports, transparent pricing with no hidden fees, and dedicated support to help you understand and enhance your company’s financial health.
Actionable steps:
- Conduct an end-of-year financial review
- Optimize payment terms
- Improve cash flow with factoring
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