Trucking is a vital part of the American economy. Every day, trucks transport billions of dollars worth of goods across the country.
Trucking is often the last mile in the global supply chain, and it is how many retailers get their products to store shelves. Without trucking, the American economy and the global economy would grind to a halt.
But how do trucking companies make money? What are their top revenue streams?
There are a number of ways that trucking companies can make money. They can provide transportation services for goods, offer freight brokerage services, provide logistics and supply chain management services, or lease trucks to other businesses.
In this article, we will take a closer look at the top 5 revenue streams for trucking companies.
How Do Trucking Companies Make Money?
Here are the five ways that trucking companies make money:
- Freight charges
- Logistics and Supply Chain Management
- Freight Brokerage
- Truck Leasing
#01. Freight charges
One of the most common ways trucking companies make money is by hauling freight for other businesses. These freight charges are generally based on the weight of the shipment, the distance it needs to travel, and the type of freight being transported.
Freight is generally transported on a per-mile basis, and trucking companies will charge a higher rate for shipments that are considered to be “time-sensitive” or “high value.”
Time-sensitive shipments are those that need to be delivered within a certain time frame, such as overnight or two-day delivery. High-value shipments are those that contain valuable or sensitive items, such as electronic equipment or medical supplies.
Trucking companies will also charge a higher rate for hazmat (hazardous materials) shipments, as these require special training, certification and insurance to transport.
The target market for trucking companies in this segment includes manufacturing companies, retailers, wholesalers, construction companies, farmers, etc.
#02. Logistics and supply chain management
Many trucking companies also offer logistics and supply chain management services. This can include things like planning routes, coordinating shipments, tracking inventory levels, and more.
Once a company invests in logistics and supply chain management processes, software and training, it has a lot of valuable data and insights that it can use to streamline its own operations. But, it can also offer these services to other companies for a fee.
This is a growing area of the trucking industry, as more and more businesses are looking for ways to optimize their supply chains but also generate new revenue streams from investments they have made for themselves.
#03. Freight brokerage
Another way trucking companies can make money is by acting as freight brokers. A freight broker is a middleman who matches up businesses that need goods shipped with trucking companies that have available capacity. The broker then takes a cut of the freight charges.
Trucking companies are well positioned to act as freight brokers because they already have relationships with shippers and they have a good understanding of the trucking industry.
Freight brokers generally charge a percentage of the freight charges, and they can make a lot of money if they are able to broker large shipments.
Some trucking companies also offer “load boards” which are online platforms that match up shippers and carriers. These load boards generally charge a monthly or annual subscription fee, and they take a cut of the freight charges.
#04. Truck leasing
Some trucking companies own a fleet of trucks that they lease out to other businesses. This can be a great way for trucking companies to make money, as it allows them to generate revenue without having to actually transport any goods themselves.
This can be useful when a trucking company has a lot of capacity but not enough freight to fill it. Leasing out trucks can also be a way for trucking companies to generate revenue during slow periods.
Truck leasing rates vary depending on the type of truck, the length of the lease, and the number of miles that are included.
Trucking companies can also make money by selling advertising space on their trucks. This can be a great way to generate additional revenue, as it allows companies to reach a wide audience with their message.
For instance, a company that sells tires could advertise on the side of a truck that transports tires. Or, a company that sells trucks could advertise on the side of a truck that transports other types of goods.
Advertising rates vary depending on the size and location of the ad, as well as the amount of traffic that the truck will be exposed to.
Trucking of goods is a vital part of the economy, and trucking companies provide an important service. Healthy trucking companies are always on the lookout for new ways to generate revenue. By diversifying their income streams, they can stay profitable during the inevitable ups and downs of the economy.
So, how do trucking companies make money? In this article, we saw a few of the most common ways in which trucking companies make money.
The most popular way is by charging for the shipment itself. Other ways include logistics and supply chain management, freight brokerage, truck leasing, and advertising.