How to Run a Travel Center
Over the past two decades, the relationship between truck stops and truckers has changed dramatically. Fuel optimizers, fleet operators, and navigation apps have come to play a larger and larger role in dictating where truckers stop along their routes and for how long, and as a result, truck stop owners have been forced to adapt to stay in business. Whether you’re looking to build a new truck stop, purchase an existing location, or just improve your current business, here are some of our tips for running a successful truck stop.
Location, location, location
Highway, freeway, interstate, turnpike: running a successful truck stop means being near major thruways. While being part of a rewards program or fleet fuel network will help to drive traffic your way, it won’t offset an inconvenient location. And with all of the price-tracking technology available to truckers and passenger vehicle drivers and the resulting increase in price-competition between gas stations, chances are that any discount you offer will be quickly replicated by stations closer to the road. Time is money for truckers, and the farther you are from an exit, the fewer customers you’ll serve.
Remember to also check with your local, state, and federal departments of transportation for plans for new highways or large-scale construction projects. You certainly don’t want to end up with what looks like a prime piece of real estate only to discover plans to reroute the highway you’re located next to for months, years, or permanently.
Explore your options
When you picture a truck stop, do you think about a single canopy, or an all-amenities travel center? Truck stops can range dramatically in size and services offered, and it’s important to think about how to best use the space you have available. Here’s the lowdown on some of the standard truck stop essentials as well as potential upgrades:
Truck stops are, at their core, refueling stations for trucks. While there is of course money to be made in fuel sales, some deft maneuvering is required to really maximize your profits. The two best areas for making a profit with commercial fuel sales are 1) commercial diesel sales to independent drivers and 2) discounts for fleets. Diesel fuel generally has a higher profit margin ($.15-$.30 per gallon) than other types of fuel, so you have the potential to make more money through these sales to drivers paying the price on the sign. On the other side of things, discounts offered to fleets can be profitable due to the sheer volume of sales, rather than individual margins. Most fleets are exceedingly price conscious, and offering them discounts is a surefire way to increase your sales.
The truth is that most gas stations only make a few cents per gallon selling gas to passenger vehicles (with the exception of premium gas). The real purpose for putting in a passenger canopy is not about the fuel sales, but rather for driving more customers to your convenience store or restaurant. In other words, if your truck stop is fuel-only with no amenities, you don’t stand to make much money by putting in a passenger canopy.
Convenience stores are where truck stops usually see a larger percentage of their profit-earnings. Fuel may be what brings customers to your location, but it’s your convenience store where you stand to make money. Unlike fuel sales, which are more restricted in pricing flexibility, the goods sold in a convenience store generally have a much higher profit margin.
However, running a convenience store also brings some noteworthy challenges. Operating a convenience store means managing convenience store staff, and given that working in a convenience store is usually a minimum wage job, employee turnover is exceptionally high. A burden is often placed on store owners to step in to cover missed shifts and the time between employees. Theft and robbery can be huge issues for convenience stores as well; convenience store crime is, in fact, so common that there are countless articles, seminars, and online resources written about its prevalence as well as deterrence tips.
Another option is to have a franchised convenience store on site, and/or to rent the convenience store space to someone else who is interested in running and managing the convenience store. While these options generally lead to less of a headache for the truck stop owner, they also result in less profit.
Similar to convenience stores, restaurants–if run well–are also where truck stops can stand to make a significant amount of money. A good truck stop restaurant can draw truckers to a location more than any other amenity, and the potential for profit is large.
Theft and robbery are usually way less of an issue with truck stop restaurants than convenience stores, but there are also far more factors involved in getting a restaurant up and running, from licenses and certifications to keeping a kitchen staffed and minimizing food waste. Again, like convenience stores, one popular option is to open a franchise. Franchised restaurants run the risk of losing customers due to their popularity (what’s the difference between the franchised restaurant at your location and the additional location at a truck stop fifteen miles up the road?), but can be a preferable choice for truckers looking to spend less on their food costs.
Having an on-site service station can bring many customers to your truck stop, whether you are offering light maintenance services, preventative services, or a full-blown mechanic, and there’s a high profit margin for these services. However, unlike the above amenities, service stations generally will not experience the same volume due to both customer availability and restrictions with just how much work one service station can perform in a day. Unlike restaurants and convenience stores, service stations necessitate degreed, certified, and/or experienced technicians, and these can be harder to find in more remote areas.
Discovering their truck is overweight at a weigh station can be a massive headache for truckers. Depending on the location of the weigh station and local laws, truckers may be forced to wait until an overweight permit is approved, given a ticket, and/or required to offload the additional freight. Being able to weigh in before stopping at a required weigh station is therefore hugely popular with truckers, and companies like CAT can install and manage scales at truck stops, with the truck stop owners taking either rent or a percentage of the sales.
Parking at truck stops has historically been free, but over the past decade, more and more truck stops have been charging fees for truckers to park by the hour or overnight. After all, simply having the asphalt available for truckers to park on involves tens of thousands of dollars for permitting, environmental and drainage costs, and paving (and repaving, and repaving again).
Offering free parking used to be somewhat sustainable when truckers had more of a choice for where they would stop to fuel up, but with fleets now dictating where drivers refuel, offering free parking no longer means you’re actually going to be making any money from the truckers who park there. What’s to stop a trucker from fueling up and purchasing goods elsewhere before heading to your truck stop to spend the night?
While charging for parking may not make you popular, it is becoming increasingly common and necessary for turning a profit as a truck stop. There simply isn’t enough parking space available for all the truckers on the road, and parking fees are simply an acknowledgment of this fact.
In December 2017, a new federal law was passed that required most trucking companies to switch to electronic logging devices (or ELDs). ELDs force truckers to take regularly scheduled breaks, meaning there are now more drivers than ever simply looking to burn some time before they get back on the road.
Charging for wifi is another area where truck stop owners stand to make a profit. Having truckers parked at your location to use your free wifi means potentially not having the room available for paying customers; charging for wifi means that if a driver is stopping to stream a show while waiting to get back on the road, the truck stop is at least making a little money, even if the trucker never leaves the cab. Offering free wifi for a limited time (followed by a charge for additional time) is a popular compromise.
Assess your competition
If you’re the only truck stop for a hundred miles, chances are that as long as your location is logical and your prices are reasonable, your business will be solid. But what if your truck stop is surrounded by other competitors?
Distinguishing yourself from your competition is key, but you can only be so flexible with fuel pricing. Having a greater availability of on-site amenities can help, but these can also be costly to maintain. Your best bet is to be connected, either directly to fleets as a preferred fueling location, or directly to truckers through rewards and points programs. These connections will bring the customers to you, so you no longer have to worry about directly competing with your neighbors.
Manage your employees
Full-service truck stops are headcount intensive, easily employing 50+ employees at any given time. Truck stops also have huge amounts of employee turnover, and finding good employees who are willing to stick around for a few years can be incredibly challenging. Being good at hiring, training, and retention are a key part of running any truck stop. After all, each aspect of a truck stop (convenience store, fuel station, restaurant, etc.) is essentially its own business, and as the truck stop owner, you are constantly juggling managing multiple businesses and employees at once.
The majority of truck stop jobs are minimum wage positions, and paying workers minimum wage can save your business money in the short term. However, in the long term, high employee turnover can cost your business even more than you’re saving. Some truck stops elect to pay employees a few more dollars per hour and/or offer benefits. While this increases your short-term costs, it may be a more cost-effective solution in the long-term.
The trucking industry is changing, and rapidly. We’ve all heard the whispers of future trucking technology, and what that might mean for the industry as a whole. There’s a lot of buzz about electric trucks and autonomous vehicles, but the truth is that no one knows for sure what the technology of the future will look like, or when exactly it will happen. Change is certainly coming; we just don’t know yet for certain what it will be.
Your best bet as a truck stop owner is to be flexible and remain adaptable to change. Trying to run a truck stop the way they used to be done, with free amenities for truckers and greater flexibility for fuel pricing, is no longer the reality of today, and attempting to run a truck stop with this out-of-date model won’t be profitable. Instead, you may want to explore the different options that are available to you, and try out some of the technology that may be the future. Whether that means installing more vending machines and doing away with your convenience store, bringing food trucks to your location instead of operating a restaurant, or installing Amazon lockers or even self-cleaning bathrooms, being willing to adapt and try new things will be key for staying afloat as the industry changes.