Three ways to save money in your transport business

By: William Holeksa

Date: 1 November 2018

Three ways to save money in your transport businessExpensive fuel, increasing competition and falling margins make it more and more difficult to run a transport business. In order to protect themselves, firms need to optimise their operations and minimise the costs of fuel, insurance, fleet maintenance and road tolls. But how?

Here are three ways that a transport business can make savings and stay competitive.

1. Reducing fuel consumption

Most of the costs in many transport companies arise from fuel prices. Therefore, improving driving style and adopting eco-driving principles can bring about noticeable benefits.

Drivers should try to drive in the most fuel-efficient way. This includes using gears appropriately and anticipating traffic conditions to avoid stop-start driving, as well as using heating and air conditioning in a sensible manner.

Having the proper air pressure in your tyres is also very important. According to tests carried out by the German Technical Supervision Association, air pressure that is just 0.6 bar lower than recommended may increase fuel consumption by as much as 4%.

In the case of one vehicle, this may seem to be a minor issue; however, across a whole fleet the impact will be strongly felt.

2. Route planning and scheduling

Proper route planning is crucial in the transport industry, and optimisation here can be a key factor in the search for savings. With currently available sat-nav and telematics systems, companies can plot their routes in such a way as to limit toll charges or avoid getting stuck in costly traffic jams.

Some delivery companies claim that, in urban conditions, avoiding right turns, even if it results in a slight detour, brings measurable benefits. Right-hand turns at a junction reduce efficiency and result in long waiting times to join a road.

Another issue is the elimination of empty runs, during which a vehicle travels between points without cargo. It does not bring profits to the business, but still generates costs related to fuel consumption and driver's wages.

In order to minimize this, transport businesses should proactively plan for backhauling (transporting cargo on part or all of the return leg, as well as to the original destination).

Another cost-effective measure is the consolidation of loads - combining smaller deliveries to the same place, often from different suppliers, into bulk cargo.

3. Avoiding currency exchange fees

Transport companies operating internationally must pay some of their contracts in a foreign currency - so a favourable exchange rate can bring additional savings. Dedicated exchange and transfer services can lower costs for your business, by offering attractive rates and reduced transaction fees.

It is not uncommon for transport businesses to have loans or leasing agreements in a foreign currency. These financial platforms may also be able to offer standing order and payment order services, so that foreign currency liabilities can be repaid affordably and efficiently.

Finally, using these services can save admin time, by allowing you to manage transactions online rather than making trips to a bank or bureau de change.

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