The trucking business is both crowded and competitive. Small business entrepreneurs need to plan for agility, sustainability and continual growth to stay ahead if they plan to run a fleet of trucks. Information technology has become an essential part of trucking, as orders for transportation flood through at a fast pace.
Function
Trucking entrepreneurs must plan for running costs per mile, managing risks and properly marketing their business to retailers, wholesalers and distributors. The cost per mile number is extraordinarily important; it's not possible to plan how you will conduct business in trucking beforehand. An operator can only devise a structure for constant adjustment to the ever-changing demands of the market.
Features
The modern trucking industry thrives on the business concept of the Just-in-Time (JIT) inventory structure. JIT uses trucks acting as mobile warehouses on wheels. Retailers predict how much product they need to have on hand at any time to keep their stocks replenished constantly while reducing storage expenses. Trucking businesses that develop ongoing relationships with retailers benefit greatly from becoming part of a constantly needed supply line.
Potential
The trucking business requires constant cost planning that changes for every load of freight. The trucking entrepreneur constantly fights to lower his costs while providing prompt service. Truck fleet operators often specialize. For example, many grocery companies require refrigerated trucks to transport their goods. Other clients may have special requirements for driver experience when dealing with very fragile or valuable cargo.
Considerations
Truck fleet owners must plan for sudden changes in the market, particularly in regards to basic costs such as fuel. Small business owners should not count on fuel costs remaining low--or high--when determining their cost structures. Truck operators need to watch their cost-per-mile closely while allowing for disasters such as accidents and mechanical breakdowns. For every additional mile that a truck travels, the probability that something will go wrong increases.
Prevention/Solution
Small business fleets should operate at a profit even with the often significant costs of insurance, proper licensing and other legal requirements. While it may be possible to "stuff the pipe" in the trucking business by skimping on insurance, such a dangerous tactic makes for poor long term strategy. Plan for mistakes and catastrophes, and the business will be able to weather them.
