Your Official Small Carrier Playbook

1 YOUR OFFICIAL SMALL CARRIER PLAYBOOK

2 In an increasingly competitive trucking landscape, success as a small carrier depends on using the right resources to address unique and changing challenges. Your Official Small Carrier Playbook Trimble Transportation The trucking and transportation landscape has always been complex. Today, considering the recent record growth in the industry’s number of new and smaller carriers, it is also increasingly complicated. If you’re wondering, there is a difference. Something that’s complex consists of many different and connected parts. Something that’s complicated consists of interconnecting parts that continuously impact each other in a variety of ways. Navigating that kind of business landscape successfully is the key to success for trucking companies of all types and sizes. But it takes an approach that involves a new way of thinking and the support of technology in an increasingly data-driven industry. Complex and Complicated

3 Your Official Small Carrier Playbook Trimble Transportation A Busy, Dynamic Marketplace— Growing Competition and Shifting Capacity There’s ample evidence of growth in the ranks of smaller motor carriers. Citing freight management firm Tucker Company Worldwide, the Journal of Commerce (JOC) reported that the number of active for-hire US trucking companies leaped by more than 58,000 in the first six months of 2021, and that most of the new companies in the count are small carriers with less than 100 trucks. Overall, JOC noted as well that the number of active for-hire trucking operations rose from about 260,000 to 318,000 companies in the same period. The Tucker data, it related, is based on information that carriers file monthly with the Federal Motor Carrier Safety Administration (FMCSA). The JOC also reported on government data indicating that the expansion in the number of motor carriers is partly the result of thousands of truck drivers striking out on their own to pursue opportunities on the spot market. That means they are not necessarily creating new trucking capacity. More likely, the new entrants point to an underlying shift of capacity to smaller motor carriers. It is those companies, the JOC concluded, who are poised to challenge the traditional approach shippers rely on to procure freight hauling services, especially those using a limited number of larger trucking operations. No matter how you add it up, it all points to increasing competition across the trucking landscape. Simultaneously, in a market often dominated by much larger carriers, small trucking companies face challenges in unique ways. Here are the top five areas of concern that can be the difference between success and failure for smaller trucking and transportation operations, along with some ideas on how to address them effectively: The Top 5 Challenges for Small Carriers Today

4 #1 Generating sustainable revenue and driving profitability Finding customers, lanes and loads that have freight at the right price are what keeps the wheels turning in your fleet. There’s no such thing as bad freight, only badly priced freight or loads that simply don’t make sense from an operational standpoint. Identifying freight and setting rates that yield a profit is about knowing your strengths and weaknesses, presenting your core competencies to customers, and having the right resources to find the right mix of shippers and brokers. It’s also a matter of realizing a balance between primary and developing lanes and matching the freight you choose to haul based on meeting each client’s timing for pick-ups and deliveries. Not to be overlooked as well is an understanding of your competition in a region, across different lanes, or with specific shippers. Ask yourself this: Without hauling unprofitable freight, what does it take to compete with other small or larger carriers? Trimble Transportation Your Official Small Carrier Playbook

5 Consignee Detention Times Re-routing and Empty Mileage Fuel Costs Trimble Transportation Your Official Small Carrier Playbook #2 Planning and executing operations to meet shipper and carrier needs The right workflow processes that meet shipper needs and requirements, and that balance lanes and loads against available capacity, are part of the foundation of controls you need to manage and grow your business. Operational success begins with a solid plan, including one that provides for continuously analyzing and optimizing your network and practices to ensure customer satisfaction and maximize equipment utilization. It also includes the ability to provide updates and other information to shippers and brokers proactively and on-demand. Metrics matter in this fast-paced, constantly shifting arena. Using data on truck and driver activity leads to the effective application of resources, and to the adoption of workflow processes that meet shipper needs and shipment requirements. Data also helps manage costs that can easily get out of control. Included are those for shipper and consignee detention time, re-routing and empty mileage, and to offset the often high and unpredictable cost of fuel by employing purchasing practices that ensure favorable pricing.

6 6 #3 Fielding and maintaining equipment and drivers Trucks, tractors and trailers with the right specifications for the freight you haul and the lanes you travel are essential for realizing the lowest possible cost of operation. Does it make more sense to buy and finance new equipment or to find used vehicles being remarketed by dealers and other carriers? That depends on a number of factors. Among them are the relative prices of new and used equipment, the cost of capital for financing your investment, the age of available used assets and any remaining warranty coverage. Fleet equipment choices also impact maintenance and repair expenses. Equipment service is a large part of a fleet’s operating costs. Ensuring timely preventive maintenance can keep costs for higher-priced repairs in check, especially those associated with breakdowns. Finding the best vendors for parts and major items such as tires can also limit unnecessary expenses. For example, a strategy for routinely and correctly inspecting tire pressures can eliminate blowouts. That ounce of prevention can avoid costly roadside repairs, and even accident costs, which can increase insurance expenses and exposure to DOT violations. Not to be overlooked is the impact of equipment choices and well-maintained assets on driver recruiting and retention success. With finding and keeping drivers a long-standing industry-wide challenge, the increased competition driven by a larger number of carriers can only make that problem bigger. And beyond finding the right equipment to attract drivers, how do your pay, benefits, and incentive programs increase your chances of recruiting and retaining the help you need? A Proactive Approach is Especially Important Your Official Small Carrier Playbook Your Offcial Small Carrier Playbook Trimble Transportation

7 Trimble Transportation Your Offcial Small Carrier Playbook #4 Addressing financial and capital needs Effective budgeting and cost management processes are the backbone of financial control. Your ability to secure receivables from a stable client base is about more than paying the bills; it’s also what leads to access to credit and working capital. Led by the right “money” person and with meaningful and actionable data you can make the right financial decisions at the right time. Consider both your income and your costs at all times and put in place credit and collection policies that account for both fixed and fluid revenue streams and expenses. Don’t lose sight of the long term—a bankable customer with a solid track record who needs a temporary extension of credit terms can be much more valuable than taking freight just to quickly generate cash flow.

8 #5 Reducing risk and ensuring compliance Managing safety and meeting the wide range of regulatory requirements imposed on trucking operations isn’t just about obeying the rules or being a good corporate citizen. It also makes very good business sense. Keeping driver licensing and medical requirements, and training and drug and alcohol testing, up to date means having drivers where you need them—behind the wheel. Overlaying operational needs for carrying capacity to meet on-time delivery obligations with driver Hours of Service availability is a key part of ensuring the highest possible level of fleet utilization, not to mention driver satisfaction. Spec’ing and maintaining equipment, and training and coaching drivers to operate as safely as possible, is a worthwhile investment in time, money and resources. It pays dividends in lower accident rates and insurance costs, and it leads to favorable results and fewer costly violations during DOT audits. Trimble Transportation Your Official Small Carrier Playbook

9 “They’re playing chess when others are playing checkers .” Trimble Transportation Your Official Small Carrier Playbook Thinking Ahead to Find Long-Term Solutions If you’ve heard that phrase before, you’ll know it’s not about the simplicity of checkers; it’s about the ability to play the more complicated game of chess. In both games, winning depends on making the right moves, but in checkers, the players are all the same, with the same abilities. Chess, on the other hand, involves a number of types of players with different capabilities, creating the need to think in several different and often changing ways. What makes that possible in a trucking or transportation operation is an approach that considers all the challenges, as well as the interacting moves needed to successfully address them. The variables that need to be considered, for example, are driven by the need to manage shipper, broker, partner and employee relationships all at the same time, and by understanding how a decision or move in one area impacts the others. With that goal in your sights, your primary concerns need to be how to apply effective practices for selecting and sourcing freight, and ways to set rates that provide the profitability needed to run your business and invest in its future. Just as important are to put in place effective operations, dispatch, routing, asset and driver utilization, equipment and maintenance, and safety and risk management practices. Not to be overlooked is that your employees are among your biggest assets, making hiring the right people and focusing on their satisfaction essential as well. In all of those areas, solutions can be found by employing the right tools and technologies to manage your business and foster your company’s growth. Chief among them is an advanced and comprehensive Transportation Management System (TMS). At its core, a modern TMS replaces time-consuming manual processes with automated practices, an important consideration for owners and operators of small carriers who often have too much to do and too little time to accomplish it. The vast breadth and scope of a modern TMS, however, offers much more. An all-in-one TMS goes beyond meeting daily business process needs by offering a performance-based solution that harnesses your company’s data. Choosing the right one gives small carriers the same intuitive and easy-to-use capabilities enjoyed by larger companies. Look for a highly scalable platform for growth. Through a variety of integrations, it can connect you to customers, partners, and drivers as well as add third-party capabilities designed to help manage various aspects of your business. A TMS also allows you to use accurate and actionable data to find and secure profitable lanes and loads. It is access anytime, anywhere structure provides the abilities you need to grow your business—successfully and profitably. The connected supply chain that powers North America’s 21st-century global economy is driven by trucking operations. A modern TMS takes advantage of the ability to access a community of partners, shippers and brokers, and even other carriers. It allows you to build direct relationships that keep your fleet productive, and your sales pipeline filled with profitable freight in any market condition.

With better tools and technologies, small carriers have that crucial ability to look ahead, to be proactive rather than reactive. In other words, to become less like checkers players and more like forward-thinking chess players. The cliché “Work smarter not harder” comes to mind because modern TMS solutions let you do what you do best—move freight. There is no clearer growth path for motor carriers, and for smaller operations Succeeding By Doing What You Do Best in particular, than establishing a foundation of business practices and processes backed by the right management system choices. The road to survival in trucking and transportation is to use the highly complicated nature of a complex industry to your advantage. The balanced and measured use of the right programs, tools, and technologies, under both current and future market conditions, is the key to success in the long run. 10 Trimble Transportation Your Offcial Small Carrier Playbook Taking a Cost-Effective Approach It’s not lost on owners of small trucking companies that one of the biggest hurdles they face as they compete with larger competitors is having the capital to invest in the tools and technology to manage and grow their business. The solution is surprisingly simple. Implementing a TMS as a Software-as-a-Service (SaaS) model is the answer. It’s an affordable solution to a common challenge because it provides for a predictable cost without requiring a large investment in an IT infrastructure and the staff to manage it. It combines capabilities, expertise, and next-generation technology to meet your business and operations management needs without the responsibility for functionality, updates, maintenance and security. A TMS as a SaaS gives you the convenience of using a single provider for both information technology infrastructure and management system needs, and it offers you streamlined access to expert one-stop support. It can also be up and running quickly, shortening the time it takes to realize a return on your investment and putting you on the fast track to growing your business.

Phone: +1 866 914 5299 Website: transportation.trimble.com The Next Move is Yours The transportation industry is constantly evolving and technology is the path to your growth and success. At Trimble Transportation, we drive innovation with transportation management solutions that empower small carriers to thrive. We welcome your inquiries. © 2021, Trimble Inc. All rights reserved. Contact Us Today