There are certain industries that seem to always be in growth mode, such as transport. Though the potential for profit is sometimes affected by high operational costs, it is, on the whole, a profitable sector to be in. And indeed, the future looks bright. Constantly evolving, it’s an industry that sees an average growth of some 3%, and when the market is worth some half a trillion dollars, this growth leads to big value. If you’re involved in — or thinking of becoming involved in — the transportation business, then take a read below, where we outline nine handy tips that’ll help you to stay ahead of the curve.
Get Focused
One of the reasons why the transportation industry is worth so much is because it encompasses so much. There are a million different aspects of transportation that a company be involved in. A good idea is to find a niche, and focus on that. The quality of your competitors will be high; if you’re spreading yourself too thin and trying to cover too many bases, then you’ll find that you’re unable to reach the high standards of others in any of your offerings. So get focused. It’s better to do one thing extremely well, rather than ten things “just OK.”
When it comes to finding your niche, don’t just focus on what you’re currently best at or what you’d like to be involved in — do your market research, identify gaps in the market, and make sure there’s not an innovation just around the corner that’ll put you out of business.
Get Your Numbers in Order
The costs involved in transportation are always high. You may have trucks, oil fees, cross-border charges, and so on. As such, one of the best steps you can take is to get your finances in order. There needs to be a profitable relationship between what you can charge and your operational costs. Once you know how much you’ll need to spend, you’ll know what you have to charge on a “per-mile” basis in order to come away with a profit. There may be times when your cash-flow is low — it happens to every transport company at some stage. The important thing is to minimize the chances of this happening by creating a sound, profitable business model.
Invest in the Best
One of the reasons why transportation is so cost-intensive is because of the equipment that’s involved. You’ll need to invest in a lot of specialized equipment before you can get to work. This is where many transportation companies trip up; they spend unnecessary money. To begin, you need to determine what you positively need, and which is just optional (or can be rented on an as-needed basis). After that, you need to find the balance between equipment that’s too expensive, and which is too cheap. You don’t need to have the latest, shiniest equipment. But equally, you’ll encounter costly problems if you pick the cheapest option, too. Take some times to find the equipment that’s right for you, and which is in line with your budget.
And Your Staff
Your equipment is only going to be as good as the people who are manning the machines. As such, it’s important that you’re investing well in your staff, in two ways. First, during the hiring process, to ensure that you end up with team players who can help push your company forward. Second, by ensuring they’re receiving adequate training, both when there’s something new to learn, and also periodically, as a refresher. If everyone in your team is capable of great work, then your company will thrive.
Stay Up to Date
All industries are prone to innovation and change, but transport is even more so. There are always new ways of transporting goods, not to mention new laws and tariffs when it comes to international transportation. As such, you’ll want to ensure that you’re kept up to date. You can do this by reading trade magazines and websites, and also attending trade shows. The Modex 2020 Trade Show, for example, is the largest supply chain management trade show in North America. There you’ll find new and exciting developments in the transport world, which will help to shape your future and your operations. As well as getting ideas relating to equipment and systems, it’s also a chance to network with like-minded professionals. Essentially it’s a way to be inside the bubble of the network to which you belong.
Source: Pexels.com
Technology Integration
There’s not an industry on the planet that couldn’t benefit from modern information technology. In the transport world, it’s essential. When the costs of running the business are so high, the integration of technology can give you a slight advantage that’ll help boost your profits. Now, of course, technology and transportation is a tricky thing to discuss — there are aspects on all ends of the spectrum. They cover next-gen GPS devices, which give a much more accurate assessment of journey time, to full-blown automated, self-driving vehicles. On the latter front, it’s for sure coming, and it may be a requirement in the not too distant future if your business is going to stay competitive. But enough of the future: in the here and now, it’s about giving your employees the tools they need to work efficiently and productively.
Cash-Flow Issues
We’ve already mentioned the high operational costs of a transportation company. Even with the best planning in the world, it’s always possible to run into cash-flow problems, purely because it’s not entirely in your hands. To keep your company’s money situation in order, you can do things like partner with gas stations to receive a discount, offer discounts as an incentive for your clients to pay early, and have a system in place that diverts a percentage of your profits into a reserve account, which can then be used during moments of difficult.
Transportation isn’t the easiest business to be in, but as it’s an ever-growing industry, there is a lot of potential to make a profitable company.
