It is no secret that fuel prices are currently skyrocketing. This fact influenced the increase in operational costs by 14%. For example, the study shows that today the costs are $ 2.01 per mile, compared with $1.77 per mile a year ago. But in addition to fuel prices, other operating expenses are also growing. It includes maintenance, insurance, labor and equipment costs. That is why we decided to speak more about ways how owner-operators can optimize their operating costs.
The first piece of advice that may come in handy is to regularly set weekly goals for your business. This will help you understand how effectively you are managing your expenses and plan your spending. If you have a weekly goal, you will also be able to learn over time how to plan this week. You need it in order to plan the most efficient routes with minimal fuel and time consumption. By the way, don’t forget about technologies that are now becoming active assistants in the transportation industry. For example, GPS software or apps can plan routes well and know how to choose the shortest and fastest route for you.
The second option is to calculate monthly expenses. Of course, you won’t be able to do this without knowledge of your weekly expenses, so go back to the first point if you haven’t completed it yet.
Why is it important to plan your monthly expenses? Again, it helps you to know what expenses await you in the future and plan how to minimize them. Such structuring of the workflow at first may be unfamiliar and uncomfortable, but over time, you will notice how much it simplifies routine tasks and frees your mind from unnecessary thoughts.
Standard monthly expenses of owner-operators include: equipment payments (renting or loans for your truck), insurance and permits (they usually depend on the type of your vehicle, state and more).
You might think that we are going to advise you to plan your annual expenses next. But don’t hurry, because the next step is to understand which of your monthly expenses are variable. What does this mean? These are expenses that cannot be predictable. This type of expense can vary greatly depending on the market movements, and you have no control over it.
This includes fuel costs, which we already mentioned at the beginning of the article. Planning your truck refueling schedule must be your top priority, as it is one of the significant contributors in your operating expenses. Variable costs also include tolls. We recommend using the “avoid toll roads” feature, which is available in many GPS apps. This also includes fines you receive for violating traffic rules. These costs are always unexpected and unpleasant, moreover they are very expensive. Try to avoid them as much as possible. And finally, there are taxes. These are what owner-operators must pay on their own every quarter.
That is all! These are simple but effective steps to optimize your operating costs. Try focusing on small, practical changes and then continue to plan your business processes to achieve success and minimize your expenses. Best of luck!