by WEX Fleet
Fuel Card Discounts Can Add Up to Big Savings
The business of trucking is not just about fueling up a tractor trailer and completing a successful delivery. The business is fraught with challenges and complications that most of us never consider but that trucking companies contend with on a daily basis. Companies managing one truck or a hundred have realized that the details matter. Selecting the right fleet card that offers the biggest fuel discount is equally as important as mechanical compliance and driver hours of service. The trucking industry can pay off as long as company operations pay attention to the details.
12 Small Details Not to Be Taken for Granted
- Implement devices that offer small fuel economy gains — benefits will stack up.
- New technologies such as AMTs can help with driver recruiting and retention.
- Paint your truck white to reduce thermal loading.
- Driver training and incentives affect fuel economy.
- Get 3% fuel savings with down-speeding.
- You lose very little productivity by slowing down.
- Driving 65 rather than 75 uses 15% less fuel.
- Pre-cool cabs before shutting down for rest breaks.
- Make sure tractors and trailers are aligned to gain fuel savings of 3% to 11%.
- Plan your parking — face away from the sun.
- Match mud flaps to tire width.
- Fuel card discounts add up.
Over-the-road companies responsible for a larger fleet are often better prepared to handle the details, but no matter the fleet size, the same concerns are present for every company, even those with just a couple of trucks. Luckily those smaller companies as well as startups are able to rely on factoring companies to help with capacity and provide support and oversight in managing the details. Factoring companies like Fleet One even offer the fuel cards and fuel card discounts that supplement efficiencies in handling the details. Starting a company can be daunting but following the correct strategy will pay off when all the “i’s” are dotted and the “t’s” crossed.
Starting a fleet means considering the details first.
7 things you need to consider before you can get on the road.
1. Creating your business plan
- Creating a business plan can be a major undertaking with requirements like financial projections and market analysis. However, small companies that anticipate future changes can consider the simplified startup format. It requires fewer details and is more flexibly based on the company’s immediate vision.
- A lean startup plan may include:
- Key activities
- Key partnerships
- Key resources
- Customer segments
- Value propositions
- Cost structures
2. Meeting the legal requirements
In addition to a valid CDL, owner-operators must fulfill a number of different requirements prescribed by the FMCSA. This includes obtaining a one-time United States Department of Transportation Number, a Motor Carrier Number, International Fuel Tax Agreement stickers, and an International Registration Plan.
As per the ELD mandate implemented in December of 2017, non-exempt carriers are also required to install an FMCSA-registered and -compliant electronic logging device.
3. Funding your business
In most cases, when starting a trucking business, an investment of between $10,000 and $30,000 should be enough to cover the costs of insurance, vehicle down payments, permits, and a variety of state-specific expenses. There are many ways to finance a new trucking business, such as using a home equity credit line, acquiring a bank loan, selling properties, and using your savings. To reduce your initial overhead, you may also want to approach lenders who can provide you with essential assets. Once you have been successful in building a dependable customer base, you can rely on freight factoring for help with immediate cash flow and other operational needs without needing to pay the interest rates of a loan.
4. Buying your assets
If you have enough funds and decide to purchase your own assets, it’s always better to go for quality over price—especially when it comes to vehicles. Paying a higher price for a brand-new truck may mean fewer repairs, less maintenance, and goodbye to downtimes that can hurt your fleet’s profitability. The same can be said for well-maintained second-hand units from reputable manufacturers. Here is a short list of things you should look at and for before you purchase a used truck:
- Any visible signs of body damage or rust
- Badly worn or unevenly worn tire tread
- The vehicle’s mileage
- The vehicle’s maintenance and oil change history
Again, once you have built a fleet and customer base, fleet factoring can help with maintenance and new vehicle purchases.
5. Insuring your assets
Every carrier needs insurance to protect their business from unexpected financial burdens. This should cover risks such as damages to your vehicles and injuries caused by road accidents. You may want to consult trucking forums and social media communities for recommendations on which insurance product to purchase based on your needs.
6. Preparing your trucks for the road
Before commercial vehicles are allowed to haul cargo, carriers must prepare for one last set of requirements. On top of your USDOT number and the company’s registered name decals on your vehicle, you also need to display your Radio Frequency Identification tags on your windshield. Also, don’t forget your license plates or International Registration Plates if you operate across multiple states.
Then make sure to provide your fleet with comprehensive fuel card solutions, as fuel cards can be almost as valuable as the vehicle itself. In a world of tight budgets and schedules, every dollar and minute counts. The Fleet One EDGE card is designed for fleets of one to 25 vehicles. The Fleet One EDGE card can take care of many of the details that truckers face while out on the road.
7. Hiring and retaining drivers
Recruiting and retaining good drivers is a challenge for any fleet. According to the American Trucking Associations, the driver turnover rate for large truckload carriers jumped to 94 percent in 2018 — 20 percent higher than the turnover rate in Q1 2017. For smaller carriers, the driver turnover rate is 73%.
A solid driver retention strategy begins with an effective driver recruitment process. Use a pre-employment screening program to view a prospective driver’s crash data for the last five years and roadside inspections for the last three years. For driver retention, also focus on driver happiness and fulfillment instead of just on cash-based incentives. When offering performance-based rewards, leverage ELDs and driver safety scores information to rank drivers according to performance, safety, and efficiency. The benefits of efficiency also go a long way with driver retention. Make sure drivers are armed with a robust fleet card solution and payment capabilities that they can rely on without error.
8. Growing your client base
Staying loyal to one customer might seem reasonable, but it may not be sustainable in the long-term. Diversification is critical for a sustainable business.
A good rule is to make sure a single client never accounts for more than 20 percent of your revenue. This means, at the very least, you should have at least five clients sending you a constant supply of loads. To attract more clients, use online freight boards, build a company website, network, and establish a social media presence. Freight factoring can also help in vetting reliable customers.
You can see that the act of starting up is full of details, from mechanical and recruitment to finance and factoring. But as long as your preparation is thorough and you follow your plan, success is sure to come.