What’s stopping you from getting the most out of your current assets and power? What’s cutting into your bottom line? Continual reassessment is the only way to ensure you address unnecessary expenses and inefficiencies in your business. Improving profitability rests on determining the root of how your company operates and what is holding up your efficiency.
This article explains how to dig into your organization and pinpoint an area most likely causing excess costs or hemorrhaging profits: trailer utilization. We will explore why a trailer is an atomic unit and how you can optimize capacity at every turn.
What is the Atomic Unit of Trucking?
The atomic unit is a tiny building block that makes up everything visible. In your business, the atomic unit is one of the minor pieces with a surprisingly significant impact. Digging into the root issues means breaking things down to the atomic unit to determine what impacts profit.
You may feel like you are managing as many lanes as you can. You probably already spend a lot of time and effort choosing the jobs with the most economical routes and the best pay.
But at the end of the day, if you have to burn empty miles to relocate a trailer or you have idle trailers sitting on a lot somewhere, you are hemorrhaging profitability.
The atomic unit of trucking is asset utilization—or how efficiently you use your drivers, tractors, and trailers. So, let’s explore how you can get more out of your assets by balancing your trailer pool and optimizing use.
Trailers Play a Central Role in the Trucking Market
Trailers are needed to cart around large loads of goods from one side of the country to the other. More than 80% of the nation’s freight moves by trucks traveling over 300 billion miles yearly.
However, running an efficient and profitable logistics business means reducing wasted miles and keeping trailers full. If a carrier doesn’t have a full load to move, they take a hit on their rate.
To keep money flowing into your business, you need to reduce deadhead miles and be smart about trailer relocation.
What is Trailer Relocation?
Sometimes called towaway trailers or load-outs, trailer relocation is as simple as it sounds—moving a trailer to a new location because you need it somewhere else. Trailer relocation might occur because of things like:
- You just bought a new trailer from a manufacturer in another area
- A receiver wasn’t ready to unload your trailer and kept it in their lot
- You had a drop-and-hook deal that left a trailer at a loading dock
- Your capacity is shifting, and you need to expand your trailer pool
No matter what reason you need to move your trailer, you essentially have two options—either you pay for a towaway or a load out.
Towaway jobs mean simply paying another power-only carrier to move your trailer from wherever it is to wherever you need it. While this move is more straightforward, it is also more expensive and unsustainable—you are paying full price for deadhead miles.
Load-outs occur when a carrier has a nearby gig they can pick up along the relocation route. If a broker or owner-operator can find a relevant job, they would take a lower rate per mile from you while using your trailer to move that load. With a load out, there are many more moving pieces to juggle, but you pay a much lower rate, and the route is much more economical because you are moving goods in the process.
Why is Trailer Relocation So Challenging?
Trailer relocations can pose a challenge because they are an inconvenience. While you need the trailer moved, you probably don’t want to figure out the details or worry that the relocation party will hold up their end of the bargain. Ultimately, the lack of visibility can be a genuine concern for asset owners — “What if my trailer isn’t returned on time? What if it is damaged along the way?”
A lack of technology is at the heart of why trailer relocation has always been so challenging. Modern load-out marketplace technology makes it possible to:
- Know when it makes good business sense to relocate a trailer
- Understand the most efficient route based on available assets and jobs
- Collect and store necessary information and historical data behind an agreement
- Enforce payments and timelines to ensure fair play among all involved parties
- Assess how your business improved based on load outs, rentals, and relocations
Traditionally, people have avoided trailer relocation as a core tactic to find capacity or as a way to increase asset utilization. However, a load-out marketplace makes it possible to improve business efficiency by targeting the atomic unit of trucking—trailers.
New Technology Changes the Equation for Load Outs, Relocation, and Capacity Concerns
Technology has changed the way we live and work. You probably use a smartphone to manage many parts of your business. You use GPS instead of a paper map to determine the most efficient route. So, now it’s time to use a tool that re-engineers how logistics companies manage capacity, relocation, and asset utilization.
First, it’s important to get players on the same page. A robust vHub marketplace allows you to see listings at a glance. Dynamic maps make it easy to see where available assets are and how much they cost.
However, just seeing the listings doesn’t make relocation a lot easier. vHub created Badger as the tool that never stops looking for the best deals—the honeypot. Badger automatically looks for the smartest connections to help you find the most efficient routes.
While each deal is made easier by Badger technology, vHub also wanted to help business owners understand where they could get the most value. Interlock is a vHub feature that helps you manage your trailer pool, invoices, and reports. With Interlock, business owners can get the answers they need to make logical, informed decisions about rentals, load outs, capacity, and asset value.
Be on the Cutting Edge of Logistics
Smart business is all about making insightful moves before the entire herd sees greener pastures. If you stay on the cutting edge of the industry, then you get modern tools faster and optimize your business before the masses.
While new technology might feel like a hassle to integrate, it’s often one of those “sooner or later” things. Do you want to navigate a new solution sooner and be on that cutting edge, or do you want to push the hassle off until later and miss out on a chance to get ahead? Either way, change happens fast; businesses must adapt or get left in the dust.
You are directly impacting your profitability by addressing the atomic unit of trucking and attacking deadhead miles. Every step toward increased fleet efficiency helps you get closer to an optimized business. And you will always working toward better insights and better strategies.
Be on the cutting edge of logistics by joining vHub today. Your FREE account allows you to browse available listings and list your idle assets or relocation jobs. If you want to increase capacity, you can look at trailer listings and use our smart tools to help you find the assets right for you.
Getting started is simple. Sign up for a vHub account to begin exploring the tools now!