The freight transportation industry has always had its fair share of volatility. The industry is generally considered to be a leading economic indicator, because transportation markets fluctuate along with consumer and industrial demand. Then came the pandemic, and the level of some fluctuations reached extents no one thought possible a few years ago. As a carrier, the most obvious way to protect your profitability is to ensure that you have a strategy to survive — and even thrive — in unsettled times.
Here are four ways you can take control and set yourself up to make more money in any market conditions:
Time is a precious resource in transportation, and the faster you can get access to income opportunities, the better. The easiest way to do this is to build a relationship with a brokerage rep at a reputable third-party logistics provider. Brokerage 3PLs have extensive access to thousands of loads daily and can identify opportunities that fit your needs.
Tell your brokerage rep what equipment you have, the kinds of freight you prefer, the lanes you run and your rates. The rep will take this information and shop thousands of opportunities on your behalf.
Think you can get the same benefit from searching all the major load boards? Not necessarily — brokerage reps have access to shipper needs that aren’t yet represented on load boards.
There’s a lot to be said for gaining efficiency based on predictable operations. Change can introduce risk and can eat into your bottom line.
Take some time to define a core network for your services. This should be a combination of lanes, where you’ll almost always have trucks available to run. Once you define your network, you can set up dedicated freight opportunities. The benefit of doing this with a 3PL is that they will have more lane-level opportunities than an individual shipper.
Dedicated freight offers you loads in the same predetermined lanes on a regular basis, at a rate that you negotiate with the 3PL in advance. It’s a great way to lock in a base of financial stability with predictable revenue opportunities.
One of the more obvious ways to become more profitable is to control costs. Some of the largest costs for a carrier include fuel and maintenance. Carrier loyalty programs provide a great way to save money with virtually no effort.
When you shop for a loyalty program, it’s often most lucrative to look at programs offered by the larger industry 3PLs. They have more buying power to negotiate for discounts on fuel, maintenance, tires and electronics. Since larger 3PLs also provide you with more business opportunities, this allows you to maximize your earning power even more.
Learn more about RXO Extra, which not only offers savings on fuel, maintenance and tires, but also pays bonuses of up to $250 for hauling loads.
Technology is key to each of the strategies discussed above. Without access to a good digital platform provided by a broker, it can become difficult to build relationships, introduce predictability to your business and maximize rewards from loyalty programs.
In addition, technology will allow you to scale your operations up and down cost-effectively as the market shifts. A good technology solution will give you the tools you need to increase your profitability in tight and loose markets.
RXO Connect is a free, industry-leading e-platform for carriers that will unlock your full earning potential by connecting you to a large volume of loads and a diversity of freight opportunities. In addition to RXO’s spot load board, and electronic bidding, negotiating and booking, you can gain these benefits and many others:
- Use RXO’s data and analytics to understand your most profitable lanes and build your network;
- Bid on hundreds of dedicated freight opportunities, creating revenue predictability;
- Enroll in RXO’s best-in-class loyalty program;
- Use the platform’s free trip planning tools to maximize cost savings; and
- Create a single point of visibility into the operations that drive the profitability of your business.
If you’re ready to take control and start making more money, sign up today.