How the Right Transportation Technology Helps Combat Rising Operating Costs

Posted by Vertrax on Jul 27, 2018 1:59:05 PM

Historically, margins in the transportation industry have almost always been slim. But in recent years, various factors have been increasing operating costs, thus decreasing margins even more. According to an analysis by PLG Consulting, trucking costs are poised to rise 8% to 10% this year. While most of these factors cannot be controlled, it is essential to be aware of them so that you can prepare for the future.

Here we will explore some of the rising operating costs and how the right transportation technology can preserve your margins.


2018 brought a spike in oil prices that resulted in the highest price of oil since 2014, according to PLG Consulting. This spike contributed towards the price of fuel increasing 50 cents per gallon when compared to 2017. As explored in The Agile Fleet Playbook, fuel prices are trending upwards and show no signs of slowing down -- and diesel fuel already accounts for roughly 39% of total operating costs according to this survey.

While the price of fuel can’t be controlled, the amount of fuel consumed can be. With optimized routes drivers are able to decrease the amount of miles traveled for each delivery or pickup point, therefore decreasing the amount of fuel used and increasing margins.


Many regulations are introduced throughout the years, but the ELD Mandate was one of the largest regulations to hit the transportation industry in recent years. As almost every driver knows, the mandate required all truck drivers, including owner-operators and company drivers, to to use electronic logging devices that meet FMCSA standards. The ELD devices were used to replace paper logbooks drivers previously used to record their compliance with Hours of Service (HOS) requirements. If not already stocked with the proper equipment, fleets have to purchase the technology and install it -- increasing operating costs.

Workforce Turmoil

There is an unprecedented combination of driver turnover and driver shortage in today’s transportation industry. “We’re short about 60,000 drivers now and that will increase to 160,000 by 2026 if nothing changes,” says PLG Consultant’s Mike Muhich. This shortage is due to both an aging workforce starting to retire and the younger generations being disinterested in driving.

The turnover rate between 2016 and 2017 for big and small fleet ranged from 64% to 90%. In order to decrease this turnover rate, companies must increase driver pay to incentivize them to stay. Increasing pay will cut into margins dramatically, but companies have to do it if they want to have enough drivers to stay in business.

With the right transportation technology, companies are able to operate with fewer drivers -- available hours can be monitored in real-time, allowing the correct number of drivers to be scheduled every time rather than trying to make an educated guess and potentially schedule too many drivers.

With rising operating costs, it is essential for transportation companies to utilize advanced technology to streamline operations and increase margins as much as possible while uncontrollable factors put pressure on them.

Download The Agile Fleet Playbook to learn about even more industry problems and the tools and strategies you can leverage to overcome them. Looking for the right transportation technology for your company? Vertrax enables trucking companies to optimize and streamline their business -- contact us today to learn more!

Topics: trucking technology