As Steve Jobs famously said, “Think different.”
A local P&D company had $3750/month more in the bank after implementing new software that was just right for its operations.
The same company had cleared $1200/month more by buying a new power unit. Which is the more profitable purchase?
It’s relatively routine to increase a fleet:
- You buy a new power unit. You can haul more freight than you could haul yesterday.
- Assuming that you bill about $3K/week/driver, you should be able to bill an additional $12,375 this month, assuming that you can keep this truck as full as your other trucks.
- If your operating ratio is 96%, you’ll have an extra $495 in your pocket this month.
- If your operating ratio is 90%, you’ll have an extra $1237.50 in your pocket this month.
And a trucking company tripled that return with new software. Here’s how they did it:
- ABC Cartage Company had two “billing girls,” Audrey and Gina, who were full-time. They did the rating and invoicing and A/R. Each billing girl cost $40,000/year plus benefits, so let’s say $10K/month total outlay.
- ABC Cartage Company bought new software from JSY. It cost them $30K the first year and will cost them $15K in support the 2nd year. (Your costs may be different depending on the options you purchase.)
- After ABC Cartage implemented JSY, they were able to get their rating and billing done in 20 hours a week, by one person. The work that had taken 80 hours went down to 20 – that’s a 75% time savings.
- ABC was able to let one of the girls go (Gina was thrilled, since she wanted to start a family and go back to school after the baby was born), and Audrey was shifted into 50% rating/billing/AR and 50% sales support.
- ABC’s costs went down by $60K per year.
- ABC’s net savings after software purchase were $30K the first year and $45K the second year.
- ABC saved $2500/mo. in the first year and $3750/mo. every year after that.
- All that extra money flowed to the bottom line.
- ABC earned more money on top of that savings, because Audrey helped the sales manager close some business that they hadn’t had the office muscle to follow up on before.
This is a hypothetical example, based on real-world stories from our customers. “Your results will vary,” as they say… but not by much.
So, where you will make your next investment?