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WHY COMPUTER

This is a little trip down memory lane - this article was originally published in 1997. While a few more computers are out there today it remains as relevant today as it was then.

COMPUTING FOR PROFITS
by
John Ewing

While much of the trucking industry has made the transition to computers, a large number of owner/operators and small fleet owners still have not taken the plunge. Operating out of a paper bag they either take all of their receipts to an accountant or bookkeeping service, or the wife is still logging the receipts into a journal. While this method of operation handles the bare necessities of keeping tax records, it leaves large gaps in the information that is necessary to survive and be successful in today's competitive trucking industry. This is a penny business and if you don't track those pennies carefully you will not be able to remain competitive.

We have all heard the stories on the CB: "Yea, I used to own my own truck, but I just couldn't make as much money as driving for a company." The question is why couldn't this driver make it? While there are as many answers to this question as their are owners who fail, they all have one thing in common - they failed to have the information at hand that they needed to run a successful business. This information comes in part from experience and in part from an evaluation of past and present performance. A computer cannot help you with the necessary experience but it excels at providing you with information about past and present performance. Let's take a look at an example: Joe picks up a load in New York for Los Angeles. What is the most profitable way for Joe to run? If you ask this question to 10 truckers, you will probably get at least 8 different answers, but it is highly unlikely that any of those answers will be based on an evaluation of all the different factors that go into making up the right answer. Speed and ease of driving are generally major considerations that will figure prominently in drivers answers, but in figuring the profitability of a route you also need to take into account cost of fuel along the proposed route, fuel taxes in various states and similar data. This information is in your records from past runs across the country, when you tried different routes, but without a computer to crunch the numbers for you, it remains hidden in the recesses of your accounting journal.

This is just one example of the information that you need to remain competitive in today's market. Other information hiding there in your records includes the amount a run needs to pay to be profitable, the real cost of maintenance by the mile and a variety of other cost factors that are vital to the planning and operation of a successful business. By knowing exactly what it cost you to run from one point to another you will know when it pays to take a cut-rate load to get out of Dodge and when you need to wait another day or two for a more profitable load. You can analyze what loads to accept and turn down so that you are better positioned to get a profitable load back to the house. These are all factors that lead to the success or failure of an owner/operator.

With a computer at hand you can also reduce your operating costs in the areas of accounting and tax preparation. Many operators are still taking in a bag of receipts and paying a bookkeeper or accountant to add up their receipts for them. By entering this information yourself, or having the wife do it while you are out on the road, you gain the benefit of having the data available for future planning and you save yourself the expense of paying someone else to do it. With the wife doing the books, you can also put her on the payroll and gain further tax advantages. An accountant may still be required to help you at tax time, but with good software and your own computer you can provide him with good information thereby minimizing his time and his fee for preparing your return.

Accounting, though, is just one of the many uses to which a modern trucker can put a computer. Armed with a desktop at home and a laptop in his truck he can communicate with home, check on routing, check the latest weather and get road conditions for almost any major road in the country. Trucking related web sites abound and they are filled with information and services for truckers. With a major online service you can log on from a truck stop in any major city and spend an evening on the net for the cost of a local phone call. Whether you're looking for a hard to find part for your classic Pete, or just a friendly conversation the internet can connect you with the world.

Company drivers can also benefit from a computer. Tracking expenses, checking logs and putting the computer to work figuring routes are just a few of the uses a company driver could find for a computer. Yet computers are still missing from the majority of trucks out there on the road and one wonders why many drivers and owners still hesitate to join the 90's. A part of this hesitation is no doubt fostered by fear of something new. Computers are somewhat intimidating and many of the old timers remember looking into computers back in the days when you needed to be a programmer to work on a computer. But that has changed over the years. Today's computers, and software in general, have improved to the point that almost anyone can master using a computer with a few hours of effort. There are, of course, still a number of things to learn and it is doubtful that you will bring your new computer home and begin computing that evening, but with a couple of evenings at the computer, and a little help from a friend, or the children who are exposed to computers daily in school, you should be able to start getting some meaningful use out of your computer in a week or two.

Another factor holding truckers back is the cost. But here also I think many will be surprised at the actual cost of getting started. You can buy a good basic computer system for under $1000. You can of course spend a great deal more than this, but for starters I would recommend a simple home multimedia system. A laptop will run about twice this amount, but it will offer the advantage of being able to go on the road with you. I do not recommend trying to put a desk top unit in your truck. They just aren't made to take the vibration and abuses of the road. Even a laptop needs to be stowed in a padded case and isolated from the vibration of the truck as much as possible.

In an industry that continues to squeeze prices down you need to make every penny count. You need all the help you can get in finding profitable runs, tracking expenses and keeping an eye on where your pennies are going. The computer can assist you with this task and make it easier for you to remain profitable. As computers take over more and more of the industry you are going to need to be able to operate a computer just to stay in business. Electronic logs, electronic data transfer (loads, billing and payment all handled by computer) are around the corner and if you don't learn to operate within this system you will be out of business. Computers have come of age and now may be your last chance to ride in on this new wave of technology. The future of the owner/operator and small fleet owner looks bright ahead if he can adapt to the new ways and prepare himself to remain competitive.

 

 

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