The arch enemy of any shipping interest is empty movement of vehicles. Truckers call it “dead-heading,” and it’s a big blow to the bottom line because there’s no revenue to cover the expenses for the miles being driven.
Because many firms with their own fleet do almost exclusively one-way transportation, they travel a large portion of their miles in an empty vehicle with the day’s deliveries already completed. The opportunity to fill that space with something that will produce revenue is something that could be a real boost to the company’s finances.
Of course, distribution isn’t just about getting physical items from one place to another. Oftentimes it can be software, technology, or information. But the process of getting it into the customer’s hands is very similar, and there are ways to make money on the distribution side even when there are no boxes to pack and load.
For now, let’s focus on tangible goods, and see how this process might not be as problematic as you may think.
How Will I Get Paid?
The first reservation many managers will have is very simple. If I haul something for somebody else, I will be adding extra time, fuel, and mileage to my day’s deliveries. How can I make sure I get paid in a timely fashion, so that this supposed improvement in my plan doesn’t backfire?
It’s a valid question. There’s no point in exploring this whole enterprise if you don’t get paid for it. And the work is probably not something that you have the experience or the personnel to handle.
What you need to do is work with a transportation factoring firm to let them handle the financial side. They can take care of the billing for you, so your company can be paid effectively as a dedicated shipper.
How Will I Find Cargo?
Again, this whole strategy fails if there is nothing for you to haul. Bear in mind first of all that if the truck simply can’t be filled at day’s end, you are in no worse condition than when you undertook this plan.
But the best thing to do is to avoid a daily hunting expedition to secure loads for your inbound vehicles. Instead, network with other companies in the same geographic area as your base, and find out what they may have that needs to be brought in daily. Cross-reference their information with your various destinations and ending points, and see if you can bring their inputs as your fleet journeys in each day.
If you can have a set routine of picking up certain items at a certain location each day and bringing them back to a set location, this process will be more efficient and predictable.
What Is My Liability?
It’s always wise to investigate matters of liability in any new venture. Begin by carefully considering the types of cargo you are willing and able to transport. Hazardous materials carry their own complex regulations and training requirements for drivers, so those are best left to specialized shippers. Fragile items may require better loading equipment than less-breakable items, such as tailgate lifts or handtrucks. So start by making sure you won’t need to make major changes to your fleet to take the work.
Most importantly, talk with your insurer. Make sure that the added mileage, greater payloads, and presence of third-party property can be adequately covered at a price you can manage.
As is always the case, a new strategy isn’t perfect for everyone. The most important thing is to do your homework before venturing into something new. If everything isn’t perfect, you simply walk away and continue as is, looking for some other ways to boost profits. If you can connect all the dots, you can get into something that can really help your business.