How to Manage Common Trucking Business Expenses

You have your obvious trucking business expenses: fuel, maintenance, and driver pay. However, there are plenty of other common costs that you might not be thinking about that can put a dent in your profits. If you aren’t paying attention, you could easily find yourself in over your head.

In this article, let’s talk about those common but sneaky costs you might be overlooking as a trucking business owner and how to keep them in check.

Deadhead Miles Are More Than Just an Empty Truck

We all know that deadhead miles means your truck is hauling nothing but air because your driver just dropped off a load and needs to head somewhere else to pick up another one. That empty trip isn’t bringing in any revenue. Yet, it still costs you time, fuel, and wear and tear on your truck.

The reality is that deadhead miles aren’t always avoidable. In some cases, you have to move empty trailers from one place to another. Maybe you have a fleet of trailers sitting at a distribution center waiting to be loaded, or you have to bring an empty trailer back to the main terminal. These dispatch scenarios involve deadhead miles, and they are one trucking business expense that can sneak up on you if you’re not careful.

As a trucking business owner, the trick is knowing when the miles are worth it. That’s where understanding your profit margins on lanes is really helpful. Not all deadhead miles are created equal. The cost of the empty miles is worth it if you’re getting a good load at the other end, after all.

EXAMPLE

One of your trucks is frequently running empty from Tucson to Phoenix before picking up a load. Since the deadhead trip and the loaded trip are in your trucking software, report on exactly how much the deadhead lane is costing you. If the cost of the 115 empty miles is higher than the revenue earned from picking up the next load, then you’re in over your head on that lane.

WHAT YOU CAN DO

Track your profit margins based on to & from lanes. This helps you see where you can or should reduce those empty runs. Even cutting a few miles here and there can make a big difference over time. With the right software, you can quickly spot when your strategy needs to change to stay ahead of the costs before they eat into your profits.

Tolls, Permits, and Fees are the Silent Profit Killers

Have you ever heard the phrase “being nickled and dimed”? Fees can definitely eat into your bottom line one load at a time. Unlike the costs you normally think about like fuel and maintenance, these kinds of costs are easy to overlook. Don’t make that mistake!

Some states are worse than others when it comes to fees like tolls and permits. If your routes run through places like Illinois, New York, or Pennsylvania, you already know what we’re talking about. Tolls and permits in these areas aren’t just a few bucks. They can hit $50, $100, or even more for a single load. Multiply that by every truck in your fleet, every day, and suddenly, these kinds of fees become a serious expense.

There are dozens of other daily fees that might not seem like much at first. We’re talking about costs like weigh station bypass programs, weight/distance taxes, fuel card fees, and congestion fees. One or two might not feel like a big deal but when they keep stacking up, they can take a larger bite out of your profits than you’d like.

EXAMPLE

Let’s say your truck is running a regular lane from Chicago to Indianapolis. Taking the toll road costs $50 but shaves off 30 minutes. If your driver is still well within Hours of Service limits, fuel cost is the same, and the delivery can be made on time, avoiding that toll could save your trucking business $200+ a month per truck.

WHAT YOU CAN DO

Most importantly, track all of your expenses in real-time. You need to see exactly how much you’re spending and whether it makes sense to adjust your routes or services before these fees eat into your profits. Tracking even the smallest fees in real-time in trucking software lets you see exactly how they’re affecting your bottom line. Pair this policy with an income statement so you can make smarter decisions and keep more of your cash.

Insurance is the Trucking Business Expense That Keeps Climbing

If you’ve been in trucking for more than five minutes you already know that insurance isn’t cheap. Year over year, insurance rates are skyrocketing.

The thing is, insurance is simply one of those necessary trucking business expenses. That doesn’t mean you have to overpay. You probably already know that premiums are based on a mix of factors such as your safety record, claims history, and even the lanes you run or the goods you haul.

EXAMPLE

Let’s say your premium jumps by 15% at renewal. That’s a big hit to your bottom line. If you dig into your policy, you might find that switching to a higher deductible or adjusting coverage limits saves you a chunk of that increase.

WHAT YOU CAN DO

Some insurance carriers offer discounts for installing dash cams devices, which can prove that your drivers are low risk. Proper software can also help you stay ahead when it comes to insurance premiums. By tracking safety records, incident reports, and maintenance schedules, you can build a case for lower rates when it’s time to renew. Maintaining detailed safety expiration dates that you can report on regularly and loop into dispatch operations means you’re not sending a driver or carrier out with a load when they’re expired on something.

Are Fuel Surcharges a Friend or a Foe?

Fuel is one of your biggest cost of goods expense. At least fuel surcharge helps to (hopefully) soften the blow. The problem is that they don’t always keep up with actual fuel costs, and if you’re not keeping an eye out, you might end up covering more of the difference than you want to.

Shippers and brokers set fuel surcharges based on national averages, but we all know fuel prices can swing wildly depending on where you’re filling up. One week, you’re breaking even and the next, you’re wondering why your fuel surcharge barely covers half the increase at the pump.You could be losing money without realizing it if you’re running lanes where fuel costs are higher than the national average.

EXAMPLE

Your trucks mostly run in California, where diesel prices are always higher than the national average. If the surcharge is based on a lower fuel cost, then you’re eating the difference. You need to know when it’s time to adjust rates if you can.

But if you track this over time and use trucking accounting software to compare surcharge payments to actual fuel expenses, you’ll know when it’s time to adjust rates or shift lanes to something more profitable.

WHAT YOU CAN DO

Compare the fuel surcharge with the fuel cost, preferably on a per lane basis. A software system that lets you put fuel surcharge and fuel expense into two separate accounts will easily show you the comparison. If there’s a gap, it might be time to renegotiate rates, adjust routes, or tweak your fuel buying strategy. Frontline Q7 makes this task easier. Instead of sorting through receipts and rate sheets manually, you can import fuel transactions for quick reporting, compare surcharges, and even automate the shipper’s rate defined by the DOE Index. That means no more manual work. As fuel prices change, the rate adjusts. All of this means you’re charging accurately and not leaving money on the table.

Maintenance is the Cost of Keeping the Wheels Turning

When something breaks it’s never cheap. Whether it’s a simple tire replacement or a major engine overhaul, repairs and maintenance can drain your profits fast if you’re not on top of them.

Some costs are predictable: oil changes, tire rotations, brake replacements. But a blown turbo, a transmission failure, or even a small issue left unchecked can turn into a five figure repair. Plus, every day your truck is in the shop is a day it’s not making money.

The best way to control these costs is to prevent them from getting out of hand in the first place. Regular maintenance is the difference between a small repair bill now and a massive one later.

EXAMPLE

Replacing a set of brakes on time might cost you $1,500. Waiting too long to take action can mean damaged rotors, extra labor, and a final bill north of $4,000.

WHAT YOU CAN DO

Stay ahead of maintenance so it doesn’t turn into a budget blaster. Set up a maintenance schedule and track every service, big or small. That way, you’re not caught off guard when a truck needs work. In addition, you’re not sending trucks that are due for repairs out on loads and risking an even bigger issue. With the right software you can log maintenance records and track repair costs. You can even spot trends that show when a truck is costing you more to fix than it’s worth. Pairing this with your profit reports helps you decide when it’s time to repair or replace.

Compliance is the Trucking Business Expense You Can’t Ignore

Compliance is one of those trucking business expenses that you have to stay on top of. If you don’t, the fines and penalties can add up fast. If you miss deadlines or make errors for IFTA, DOT inspections, or Hours of Service logs, it can cost you thousands. Not to mention the headache of dealing with audits and the downtime, which in turn costs you more money.

Keeping up with compliance isn’t just about avoiding fines. It also keeps your trucks on the road.

EXAMPLE

If you’re still tracking IFTA manually, you might be over or under paying taxes without realizing it. A few missed miles or gallons here and there can throw off your fleet’s average mile per gallon, which throws off the entire calculation. This can lead to fines or unexpected bills later, or worse, an audit.

WHAT YOU CAN DO

Instead of scrambling to pull together receipts and logs, automate IFTA reporting by tracking fuel purchases and mileage in real-time. Keeping track of documentation within your trucking business software is just one more step you can take.

At the end of the day, trucking business expenses are something every owner has to tackle. That doesn’t mean they have to be a constant source of stress.

The right trucking software can help you track costs, streamline your processes, and give you the data you need to make smarter decisions. At Frontline Q7, we’re all about simplifying and providing transparency for your business. Reach out to us today so we can talk about how Q7 trucking accounting software can help you wrap your arms around your trucking business finances.