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
3. Strengthen Operational Efficiency Amid Rising Costs
The goal: Reduce fuel consumption by 2-3% through targeted efficiency measures by year-end.
With the cost of fuel and other expenses always on the rise, making your trucking company more efficient is a great goal to maintain profitability.
One idea to save on fuel costs is to introduce fuel-saving initiatives across your fleet to encourage drivers to be more fuel-efficient. For example, you could start a driver training program that’s focused on fuel-efficient driving techniques (and even reward drivers who drive efficiently). Other optimizations might include analyzing routes, reducing deadhead miles, and consolidating shipments to maximize truck usage (and therefore unnecessary fuel expenses).
Another way to save on fuel costs is to implement a fuel card. Fuel cards are specialized payment cards trucking companies use to buy diesel, DEF, and other fuels. They offer rewards and/or points on fuel purchases and also allow you to easily control spending and monitor your monthly fuel expenses.
Actionable steps:
- Implement a fuel-efficient driver training program
- Analyze your routes to reduce spend
- Research fuel cards that can save you money at the pump
4. Navigate Labor and Regulatory Challenges
The goal: complete a full labor and compliance audit by the end of Q4 to prevent fines or legal complications in 2025.
Labor regulations, such as California’s Assembly Bill 5 (which states that in some cases, independent contractors should be reclassified as employees), are constantly reshaping the landscape of hiring labor for your fleet or brokerage. It’s important to stay up-to-date on these changes to avoid hefty fines or legal complications.
A goal to set for yourself in the coming months is to conduct a thorough labor compliance audit and review employment classifications. This will help ensure that you’re compliant with both federal and state labor laws, especially in areas that are coming out with new regulations.
In addition to conducting a labor audit, consider upgrading your payroll systems and benefits packages to reflect any new classifications and ensure legal compliance. By focusing on labor and any regulatory challenges in Q4, you’ll set yourself up for a strong (and compliant) start to 2025.
Actionable steps:
- Conduct a labor compliance audit
- Update your payroll and benefits system
5. Strengthen Vendor Relationships and Prepare for 2025
The goal: Secure at least two renegotiated contracts with key vendors by the end of Q4 to lock in cost savings for 2025.
Strong vendor relationships are what separate top trucking companies from average ones. You are only as good as your best vendors. To close out 2024 on a good note, review and renegotiate vendor contracts where you can. This could include reviewing contracts you have with fuel suppliers, parts providers, and maintenance vendors. In addition to reviewing contracts, talk to your vendors about contingency plans to ensure the continuity of their service.
By securing better rates and more favorable terms, you’ll not only lock in cost savings but also strengthen the relationships you have with your current vendors and give you the flexibility to build new ones. Strong vendor relationships are crucial to running a successful trucking company, especially when facing supply chain disruptions.
Actionable steps:
- Review and renegotiate vendor contracts
- Establish contingency plans with existing vendors
- Strengthen relationships with vendors
Hit Your Goals in The Rest of 2024
As 2024 comes to a close, trucking companies should focus on strategic short-term goals to end the year on a high note and set themselves up for success in 2025. These goals include addressing their freight pricing, improving operational efficiencies, staying in compliance with regulatory changes, and improving cash flow and vendor relationships.
Want to crush your goals for the rest of the year? Schedule a consultation with our team and we can help you ensure your cash flow is solid for 2025.
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