Many trucking industry observers, as well as economists, are still talking about a mild recession later this year or sometime next. I am not an economic guru but whether or not we have a recession, now is a good time to look across your organization to see places where you can tighten things up and cut expenses without impacting the quality of service you provide.
See also: Several reports, experts sound trucking economy red alerts
In a previous blog, “Take the time to re-evaluate your operation,” I talked about rightsizing your fleet, but along with that you also need to focus on asset utilization.
Are you underutilizing some assets while overutilizing others? Neither of those scenarios is good and both are costing you money. Obviously, when an asset is sitting on your lot it is not delivering freight, so it is not bringing in any revenue. However, an asset that is overused is likely to incur higher maintenance and repair expenses. In addition, you could go over the mileage or hourly parameters set forth in your lease agreement and that will result in an increased charge at the end of the lease. The goal is to balance utilization of all assets so that each asset is used for the exact right amount.
See also: When is the ideal time to replace an asset?
If you do not already have a preferred vendor list, now is the time to think about making one. Concentrating spending with a few vendors can result in discounts and rebates which can lead to savings. Vendor count may have grown during the supply chain challenges of the last few years, but as those are being resolved you may be able once again to reduce it.
If you already have a preferred vendor list, do an analysis to see how much spending is happening outside of those preferred vendors. If employees are straying from the list because they cannot find what they need from a preferred vendor, re-evaluate who is on the list. However, if preferred vendors are meeting your company’s needs, reinforce the need for purchases to be made from the list of authorized vendors.
Closely scrutinize all vendor invoices to make sure you are being given every discount to which you are entitled and make sure you are receiving all applicable rebates.
Engage your employees in your efforts to find hidden cash. Ask them where they see waste occurring or what things they think you can do to save the business money. Remember, even small savings add up and can result in big gains.
Even if the predicted recession does not materialize, your business will be more profitable if you take some time to review your operations. You just might find some hidden cash, and that is always a good thing!
Jane Clark is vice president of member services for NationaLease. In this position, she is focused on managing the member services operation as well as working to strengthen member relationships, reduce member costs, and improve collaboration within the NationaLease supporting groups. Prior to joining NationaLease, Clark served as area vice president for Randstad, one of the nation’s largest recruitment agencies, and before that, she served in management posts with QPS Cos., Pro Staff, and Manpower Inc.
