Increasing profits in the Cargo Industry
We all want to increase our business profits, but most of the time, it’s easier said than done. When you consider ways you can increase profit, your first thought might be to ‘get more business’, but this is not always the best way.
Although increasing business is surely a great thing for the growth of your company, it also results in greater fuel consumption and costs, more staff, maintenance and, more often than not, headaches.
Rather than just increasing business and seeing the rise of all these factors too, why not increase the profit margin on your existing business?
Increasing efficiency levels throughout your business will help to improve profits without having to take on extra business which you may not yet be equipped for.
Consider this simple scenario:
If your business creates $1M in revenue with a 5% profit margin, you’ll see $50k in profit.
But by increasing your profit margin by just 1%, you would see an extra $10k in profit, like this:
$1M revenue with 6% profit = $60k
You don’t necessarily have to gain extra business or revenue to increase profit, rather, you can simply increase your profit margin by improving efficiency.
In essence, without having to handle extra work or stress, you can increase the amount you make in profit.
INCREASING TRANSPORT EFFICIENCY:
There are many ways you can improve efficiency to see this profit increase and you are probably already doing a lot, such as:
– Ensuring the type of vehicles and trailers you are using suits the work you do
– Keeping equipment well maintained (including tyre pressures)
– Monitoring driving style – smooth acceleration and braking
– Using optimal routes – particularly for multiple pickup/drop work
These factors will all impact fuel consumption and travel time, and in turn, profit.
While transport efficiency is a big factor, don’t underestimate the importance of office/admin efficiency either.
INCREASING OFFICE EFFICIENCY:
– Does your office run as smoothly as it could?
– Is the same data being entered manually into multiple systems?
– Are your staff always on the phone to clients and drivers to coordinate work?
Every time a staff member writes out a consignment note from scribbled telephone notes, transfers it to a run sheet/manifest, then enters it into a book keeping system, they run the risk of making an error. The data is being handled too many times, and potential errors which come with this are detrimental to your business. How much are these errors costing you?
How much time is spent on the phone with clients or answering their emails simply to let them know the location of their goods?
– Automate the tracking process
– Save the time and money it takes for your staff to do this
– Let staff focus on more important, more valuable tasks
– Provide a professional and reliable ‘face’ for your business
Even better, let your clients find the answers to their questions themselves, let them view the status of their consignment notes in real time without your staff having to lift a finger. It’s like they’re doing the work for you, and they won’t even know it!
You might say “But we need to talk with our clients, to find out their needs”. Great! You know the value of good communication, but now you can call them on your terms, not just speak to them when they are having problems or when you are busy.
Now, your office is running smoother than it ever has before, and staff can spend their time more effectively, meaning you can seek out that extra business you were thinking about earlier. You finally have a system in place to handle the added workload and you can be confident that your clients are being taken care of.
But the best bit of all? Not only will your staff benefit from the easier work system, your clients will find it easier than ever to work with your business because of it, and might be more willing to recommend you.
Sounds too good to be true, right? Think again.
If you’d like to see how Cargo Office can change the way you do business, click on the Contact Us button below.