How to Easily Calculate and Improve Your Trucking Company Profit Margins

20 Easy Ways Trucking Companies Can Increase Profit Margins This Month

Last Modified : Jul 10, 2024

Fact-checked by: Bruce Sayer

You’re a great truck driver. You know how to choose the best routes, are always reliable and deliver on time, every time. But it takes more than being a great trucker to run a profitable trucking business. We don’t want a lack of cash flow to hold you back. That’s why we put together three easy ways to help increase your trucking company profit margin, so your business can thrive and grow in the ever-changing world of trucking.

Reduce Costs

We all know that fuel is a trucking company’s biggest expense. Because the cost of diesel fuel fluctuates throughout the year, it’s important to get the very best mileage per gallon to offset its cost. Let’s assume today’s average diesel fuel is at $3.00 per gallon. Here are some proven ways to reduce your fuel costs:

1. Stop paying full price for fuel

Utilize fuel cards! There are several companies that offer fuel cards to give you discounts and other benefits at truck stops nationwide. When comparing the different fuel card programs, you want to consider the coverage, savings, and benefits for your small or medium-sized trucking company.

For example, eCapital’s fuel card can save you thousands per year per truck and covers more than 16,000 locations from the top fuel providers in the country.

2. Cut down costly idling time

According to the US Department of Energy, idling a heavy truck consumes about 0.8 gallons of fuel per hour. Typically, a long-haul truck idles about 1,800 hours per year, using about 1,500 gallons of diesel.

Auxiliary Power Units (APUs) are a great alternative. They provide in-cab climate control and a power source for your appliances. Some are diesel powered and burn 0.25 gallons an hour, consuming about 450 gallons a year. The estimated savings at $3.00 per gallon is $3,150 each year.

In addition, idling a truck also increases engine wear which also cuts from your profits.

3. Plan your route

Drivers now have hands-free access to the best routing as they drive. GPS or routing software can ensure that you drive the fewest miles, saving fuel. Optimum routing can even be done using your Electronic Logging Device’s GPS features.

4. Adjust your driving habits

ELD (Electronic Logging Device) tracks hard accelerations, harsh braking, speeding, excessive idling, and fuel economy all in real time. Truckers can utilize this information to improve driving habits and save fuel to cut costs.

5. Use better tires

Many fleets are outfitting their rigs with Low-Rolling-Resistance tires (LRR) to save fuel. And tire life is extended by LRR retreading.

According to the US Environmental Protection Agency, LRR tires can reduce both costs and emissions for a long-haul class 8 tractor-trailer by 3% or more.

If you drive 100,000 miles a year and get 6.5 miles per gallon fuel that means you buy 15,385 gallons. A 3% drop in fuel costs means you burn 461 gallons less in a year. At $3.00 per gallon that’s a savings of $1,383.

Also, keeping your tires inflated to manufacturer’s specifications also saves fuel and extends tire life.

6. Use your cruise control

When you’re on and off the gas pedal, it becomes difficult to hold a steady speed. Constantly speeding up and slowing down, even in small increments, wastes fuel. Using your cruise control on the open road can hold a much more consistent speed. Fuel consumption is reduced, creating savings for you.

7. Stop speeding

According to an article published by FleetOwner, a report by American Trucking Associations states that a truck cruising at 75 mph burns 27% more fuel than one driving at 65 mph. You can save a lot just by slowing down.

For example, let’s say your truck travels 100,000 miles in a year and at 50% of the time on highways at 75 mph. And at that speed, your truck averages 5 miles per gallon. By dropping your speed to 65 mph you decrease fuel consumption by 27% and your miles per gallon (mpg) goes up to 6.35.

By shifting from 5 mpg to 6.35 mpg over 50,000 miles, you save $3.00 per gallon and $6,377 a year per truck.

8. Look at aerodynamics

Transport Canada commissioned the National Research Council Canada (NRC) to conduct wind tunnel tests to evaluate the aerodynamic performance of various drag-reduction concepts.

The tests were performed on a 30% scale model of modern tractor-trailer combinations. Tests of wind drag created by the gap between tractor and trailer found that for every foot the gap was reduced, drag decreased by 2.6%. That translates to fuel savings of about 213 gallons per tractor per year.

Trailer underbody side skirts that extended over the trailer wheels saved an additional 800 gallons per year. At $3.00 a gallon, these findings add up to annual savings of about $3,039 per tractor-trailer.

Other Cost-Saving Tips

9. Perform regular preventive maintenance

Maintenance has evolved from preventive to proactive. Technology such as ECMs (Electronic Control Modules) coupled with a wide range of sensors in vehicles provides alerts to many issues before components fail, saving you towing and downtime.

Perform regularly scheduled maintenance on your trucks to reduce costly breakdowns.

10. Reduce driver turnover

According to the ATA, we are failing to retain our drivers 87% of the time. A recent article in FreightWaves Magazine stated the average cost of turnover is at $11,500 per driver.

A survey of recruiters by Driver iQ reported the number one reason drivers quit is total compensation. The number four reason is the unpredictability of paycheck each week. Thousands of trucking companies turn to invoice factoring to improve their cash flow so they can retain their drivers.

Increase Revenue

Now that you are saving on costs, let’s look at a few simple tips to increase revenue.

11. Know your cost per mile (CPM)

Knowing your CPM is essential to increasing your revenue. Here’s how you can calculate your CPM:

Fixed Costs + Variable Costs / Total Miles

Fixed Costs

Fixed costs are monthly expenses that your trucking company must pay each and every month whether you are hauling or not. These include insurance, property leases, permits, salary, and other services.

Variable Costs

Variable costs are the monthly expense that your trucking company incurs to operate your trucks. For example, fuel, maintenance, repairs, tolls, meals, lodging and other expenses incurred on the road are all variable costs. Calculate this cost monthly to get up-to-date information on your company’s variable spending habits.

Now for the formula in action:

 Total Monthly Fixed Costs
(truck payments, insurance, plates, permits, salary, and other)
 Total Monthly Variable Costs
(fuel, maintenance, repairs, permits, tolls, and other)
 Total Miles Driven
(loaded and empty)
 Total Cost per Mile
$4,700 + $5,800 / 8,300

The information above is provided as a simple example. Use the formula above to estimate your cost per mile to determine the best per-mile rate to charge your shippers. You can also use our online cost per mile calculator to determine your cost, profit, and rate per mile.

12. Find new customers through load boards and brokers

Utilize load boards and brokers to find loads. As you do, you’ll build relationships with new customers. eCapital offers an exclusive load board to our clients to help them find high-paying loads nationwide.

13. Make your customers happy

Exceed your customer’s expectations to build trust. Pick up and deliver loads on time and without any freight claims. Your customers will be encouraged to give you more loads. They’ll keep you as busy as you want to be.

14. Negotiate directly with shippers

Load boards and brokers are great resources when you have empty trucks, but they can be expensive. To further increase your revenue, create a list of direct shippers and work with them personally.

15. Increase your freight rates

Increase cash flow by charging more. Use the cost per mile calculator to see how much it costs to run your truck.

  • Pay close attention to spot rates,
  • Know the loads-to-trucks ratio,
  • And watch the load times to determine what a fair market rate looks like.

Also, don’t be afraid to negotiate. If you know your cost per mile and understand the market, you can justifiably quote a certain rate.

16. Spread the word

Use the following sales and marketing tips to make shippers aware of your company and the services it offers.

  • Cold call, email, or visit shippers you’d like to haul for.
  • Join associations and online forums to let everyone know who you are and what you do.
  • Get social on Facebook or Twitter. Build a complete profile, connect with your potential customers, and share pictures and updates.
  • Ask your customers to leave positive reviews on your business profiles like Yelp, Google, or Facebook.
  • Build a professional website and share it on your social media profiles. It’s another way to keep your business relevant.

17. Create consistent cash flow

Cash flow is a common headache in the trucking industry. Create a consistent cash flow with these tips:

If you only need a small amount of cash, you might want to consider using a credit card. We only recommend it as a quick short-term solution, because this option does create debt and can incur very high-interest rates anywhere from 12-29%. If you decide to go this route, you must have a plan to pay off the balance each month.

18. Take out a small business loan

Taking out a loan can get you the cash you need to keep your trucks running until invoices are paid. It’s a great option if you can qualify.

A lot of the trucking companies we work with, especially newer ones cannot qualify for a loan. You’ll need to gather a ton of documents, collateral, and a very good credit score. Most truckers need cash now and cannot wait 60-90 days for the loan to fund.

And remember, a loan is a debt that must be repaid. If you’re short on cash to operate, it can be difficult to pay back the loan, so proceed only if you have a solid business plan in place.

19. Utilize Invoice Factoring

Freight Factoring is an affordable, quick, and easy cash flow solution. There are many benefits, including:

  • Generate cash flow immediately: Get paid for delivered loads within 24 hours.
  • Quick and easy approval: If you have less than perfect credit, it’s ok. If you have outstanding invoices due in the next 90 days from creditworthy customers, you’re approved.
  • No debt is created: Factoring is not a loan. This is cash you’ve already earned. You’re just getting it faster!
  • Free credit checks on your customers: Know ahead of time if a customer is likely to pay.
  • Billing and collection services: Factoring companies handle all your billing and collections, so you don’t have to hound customers for payment, which means you don’t have to waste your precious time chasing payments.
  • Increased productivity: With fast access to cash and a back-office team handling your billing and collections, you can focus on operating at your most productive level.
  • Grow your business: A consistent cash flow allows you to take on more jobs, add drivers, and buy more trucks.
  • Save on fuel: Make sure you choose a factoring company that offers a free fuel card, which can save you up to $9,000 per truck per year.

20. Borrow from your rich uncle

If you are lucky enough to have a rich uncle, then this is the way to go. When you’re in a pinch, borrowing from a family member could be a great way to combat the dips in cash flow. But treat it as a business agreement and negotiate a fair repayment plan, because you do have to face your uncle again at the next family gathering.

Putting the above tips into practice consistently over time can have a dramatic effect on your bottom line. It can be the difference between barely getting by and thriving. Always remember you are in the driver’s seat and it’s up to you how much money you want to make.

eCapital understands the cash flow demands you face and gets you the immediate funds you need for your transportation business. No matter if you have 1 truck or 100, we can get you quick cash you need to:

  • Expand your fleet
  • Hire more drivers
  • Pay for fuel and operating expenses

It’s simple, fast, and free to get started. Why not get a free, no-obligation quote? Contact us.


ABOUT eCapital

Since 2006, eCapital has been on a mission to change the way small to medium sized businesses access the funding they need to reach their goals. We know that to survive and thrive, businesses need financial flexibility to quickly respond to challenges and take advantage of opportunities, all in real time. Companies today need innovation guided by experience to unlock the potential of their assets to give better, faster access to the capital they require.

We’ve answered the call and have built a team of over 600 experts in asset evaluation, batch processing, customer support and fintech solutions. Together, we have created a funding model that features rapid approvals and processing, 24/7 access to funds and the freedom to use the money wherever and whenever it’s needed. This is the future of business funding, and it’s available today, at eCapital.

eCapital Logo

eCapital Corp. is committed to supporting small and middle-market companies in the United States, Canada, and the UK by accelerating their access to capital through financial solutions like invoice factoring, factoring lines of credit, asset-based lending and equipment refinancing. Headquartered in Miami, Florida, eCapital is an innovative leader in providing flexible, customized cash flow to businesses. For more information about eCapital, visit

More Great Reads