Navigating the complexities of over-the-road trucking requires shippers to tackle a variety of challenges that threaten their profit margins. Rising expenses and market volatility are constant concerns, yet they also offer opportunities for strategic improvement.
By understanding and addressing these issues, shippers can secure a more stable footing in the industry. As noted in Industry Outlook for 2025 & Beyond, “The ‘online buying adoption curve’ accelerated dramatically, compressing the increase in online purchases into two years what experts had predicted would take seven to eight years to achieve.”
Companies managing LTL or cross-border shipments should also account for additional variables like customs documentation and LTL-specific freight challenges when assessing overall costs.
Fuel costs significantly impact shipping expenses and affect every facet of a shipper’s operations. As prices surge, they create a ripple effect that inflates shipping costs and compresses profit margins. Shippers moving freight over long distances must optimize routes to limit unnecessary fuel consumption. Investing in route optimization software and fuel efficiency programs helps control these expenses and improve delivery timelines.
Driver wages and benefits have been increasing steadily, placing additional strain on shippers’ operational budgets. The scarcity of skilled drivers has prompted companies to offer more attractive pay packages, impacting the overall cost of goods sold. Retaining experienced drivers through structured incentive programs, consistent work schedules, and improved working conditions helps stabilize labor costs and maintain operational efficiency.
Older fleets require frequent maintenance, leading to increased operational costs. As vehicles age, the likelihood of breakdowns and repairs grows, resulting in unexpected expenses that dent profit margins. Shippers managing their own fleets must implement preventative maintenance schedules and invest in fuel-efficient vehicles to lower long-term operating costs. Companies relying on third-party carriers should prioritize partnerships with providers that maintain modern, well-serviced equipment.
Staying compliant with evolving regulations is both a necessity and a financial burden for shippers. Non-compliance leads to fines, operational disruptions, and reputational damage. Shippers must allocate resources to monitor regulations, ensure proper documentation, and integrate compliance into their daily operations. Those engaged in cross-border and LTL shipping must also manage the added complexities of customs documentation and freight classification to avoid penalties.
The freight market is characterized by unpredictability, with demand and shipping fees fluctuating regularly. This volatility disrupts pricing strategies and affects profitability. Shippers moving smaller loads through LTL shipping need a pricing strategy that accounts for seasonal shifts and fluctuating carrier capacity. Locking in contract rates where possible and working with multiple logistics providers helps mitigate cost spikes. Furthermore, a managed freight model can provide long-term cost control and reduce confusion and instability despite market volatility.
To safeguard profit margins, shippers should employ targeted strategies that address these specific challenges:
Implementing effective cost management strategies strengthens financial stability and improves overall business operations. Reducing unnecessary expenses allows shippers to offer competitive pricing, maintain steady profit margins, and adapt to shifts in market demand.
Strategic partnerships further enhance operational efficiency. By partnering with organizations like PRIMO, shippers can access shared resources and expertise to lower transportation costs. These partnerships support flexible pricing strategies and create long-term cost-saving opportunities. Connect with a PRIMO team member to begin transforming your shipping operations today.