Never Stand Still
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What a thing to admit! It's like they were not aware of failure.
Say we wanted to put an LTL trucking company together.
First we would need to buy land and a building.
Then you have costs to maintain that building, you have electricity, water and heat.
We also would need telephone, and Internet now that can all be bundled but still that's a bill right there.
Then we need adequate waste disposal so that's a bill for garbage collection.
Then we need to furnish the building desks, chairs, computers, telephones, vending machine, water cooler. Soap, Toilet Paper and other cleaning supplies. Even if you bought used office furniture and stuff it's still costs money.
Now granted we can hire a service like S.A. Communal or a number of them for janitorial and building maintenance needs, but already we just dropped a ton of money.
Then we get to the dock, we need dock plates and tow motors, pallet jacks both manual and electric. Two wheel hand trucks, U-Boats and Flat Carts. Again all those items when added up are in the thousands of dollars and all need maintenance sometime.
We need to do sales and marketing work that's all very expensive and time consuming and a real slow go. You have telemarketers calling customers to set up appointments for sales reps to go there and talk to customers this all is costly, time consuming and very slow awful process it's not fun at all. You've got to lease cars for the sales people that's all an expense marketing expenses can be huge I don't know the percentage, but it can be a lot. Old Dominion is a company that spends a lot on marketing you see them advertise on Fox News and on the walls at Base Ball stadiums there very out there on marketing.
Then we probably need to have a maintenance shop at our terminal so, that's another expense tools, textiles, computers and computer software all very expensive. Office supplies stuff like that.
So then we get down to actual vehicles.
The maintenance shop they need a shop truck or 2 so that's a vehicle one of those probably has to have a snow plow to move the snow away in the winter.
Then we actually have to have the trucks them selves. This is a problem because new trucks have complex environmental controls and computer systems and can be prone to constant break downs and long periods of down time so if we only need one truck in the begining we better make it 3 trucks because when truck one breaks down we need to have a back up for it and when that truck breaks down we need to have a back up for it and when that truck breaks down hopefully truck one is out of the shop and can go back on the road.
Now then we need to buy trailers and converter dollies we need 2 trailers for every 1 converter dolly so probably best to have 3 converter dollies and 6 trailers this ought to cover us. Now trailers and converter gear won't break down as much usually and last a good amount of time converter gear is very heavy duty and well built so we should have those for a while trailers they can develop problems, but again at the on set we should be alright.
Now will need a lift gate trailer for city deliveries so that's $10,000 added on to the cost of a trailer.
Now it's invetiable there's going to be places we can't get our trucks into because of height and what now, so will need to buy a straight truck for those stops. Probably need to buy 2-3 of those because you know one breaks down so you use the second one that one breaks down so on and so fourth plus if by any stroke of luck all of them work at the same time will have the capacity.
Then we need to buy $3.00 a gallon diesel fuel for all these things and DEF Fluid.
Then we have to hire people.
People in the office to pay the bills, and schedule workers to work and hire and fire people.
People in the sales department
People in the customer service department
A terminal manager.
A fleet manager and mechanics.
Weights and Measurements Inspector to make sure customers aren't cheating us.
Then we need to hire drivers to drive the trucks and deliver the freight.
Then that means we need a Safety Department to do bureaucratic work and shuffle paper work around so we have to pay someone to do big government compliance stuff and really if you think about it that person really doesn't make the company a ton of money just kind of allows us to keep going.
So then we need to pay and provide benefits to all these people.
Then you know you hire Little Timmy and he's a driver and for whatever reason Little Timmy ends up dumping a pallet off the back of the lift gate trailer so now we have to pay the claim on that freight and we've probably gotten a broken pallet jack.
It's enveitable someone will run over a hand truck so there's $200-$400 down the drain.
Then the toilets at the terminal will back up so we need a plumber that's $700.00 bill right there.
Then landscapers to cut the grass.
Pressure Washer and Industrial Cleaning Service to Hose Down the out side of the building.
Probably a good idea to have a company like All-Sweep Come through once or twice a day to clean the terminal yard up so we don't get flat tires and things.
Then you know computers and an IT system and the cost to keep that all up so we can track shipments and driver logs and capture prof of delivery. Which also means we need website hosting and a company to make the website or hire people to do it either way that's a bill and that's maintenance right there.
Now the worst part about all this is we need to then compete with other carriers for business so that leads to price drops and discounting and entertaining customers and letting customers use and borderline abuse us.
Like a customer ships something out and the trucks are on the highway humming along and all of a sudden whoopsey poops there's been a shipping change up and the trucks got to set it's rear trailer out at the next relay point or terminal and another truck has to be scrambled to take that trailer back to where it came from or to a different destination or it just sits there in the yard at the terminal till word comes in on whats going on which means while the trailers sitting there we out the revenue it could be creating. Which means we need to buy another trailer which means a whole other set of expenses.
License Plate Fee's
Toll Road Fee's
Oh we also need to wash our trucks and keep them clean. Of course our $100,000.00 truck comes into the terminal and we open the passenger door and a mountain of garbage falls out. (That happened to me once at the beer company.)
Then we see switches and stuff in the truck are broken and busted and there's chewing tobacco spit, spit up all over the cup holders and console of the truck. Some trucks will get 10-12-13 years out of other trucks you'll have drivers who drive them hard and put them away wet and will end up getting 6 years out of a truck we should have gotten 10 years out of, but those things will happen.
So all this and then were told by customers "Be competitive." Which means be cheap. So then that creates the hunt of trying to find better more profitable frieght that's not as cheap, but that's hard to do and the whole entire thing can get very expensive very quickly. I can totally see and completely understand where CF said they only made $97.00 or what ever it is on that one load. That was under best case scenarios. They didn't get into real world where the loaders mal-load the truck and damage a bunch of freight or trucking accidents god forbid or yard hostlers rough handling all the equipment and instead of a gentle back in to the dock instead you get SLAM!
Or drivers at the fuel island run over the squeegee to wash there windows and other supplies like that because after all, "It's not my truck, none of this is my stuff what do I care, you people owe me a pay check."
It always bothered me when companies would provide all the stuff people need to do there jobs right and the company I work for there pretty good about that they I think really do give us a lot of the right stuff and it's amazing how many people are just "I only do this for a pay check screw everything, you owe me a pay check." and they rough house everything and break things and what not. My company pays profit sharing at the end of the year and there I feel pretty generous about it and all that rough handling and the rest of it, that's all nickle and dime stuff that comes out of our profit sharing.
But I know most people live pay check to pay check are in debt and don't care about retirement or frankly anything down the road at all. They got kids and a wife at home and they need things, or they have a pregnant girl friend who's become a source of stress because now that's a big to-do and you know not everyone is single like me. My biggest concern is keeping my newly planted grass alive which sounds silly as a talk about it LOL. Where other people they have kids and legal problems and marital problems and relationship problems and car leases and bills bills bills. Me I just do without but I can I live alone and don't have someone complaining about whatever it is. Hell I lived in my house for 6-9 months before I got a couch. I didn't need to spend $1000 bucks on a couch.
So back to it to wrap it all around, people are the way they are because of what's listed above and that all costs companies money now the good news is all the companies have these stupid costs so eventually they all can't go any lower and the one who does goes lower eventually goes under. Pizza Today had an article about coupons and they said the trend for Pizza Places was to getaway from 50% off and buy one get one free and price discounting because what it starts is an industry wide race to the bottom and there's no winners only losers and the person who gets to the bottom first loses and goes out of business.
Instead what they recommended was what you see now a days which is more pop, pizza and wings family pizza night meal deal for $30.00 or something like that.
I wonder if trucking companies do the same thing instead of just discounts and undercutting they kind of say hey we can do liftgate delivery and some warehousing and provide you with yard switcher service and this and that all for $1.7 million a year where with the other guys you're just getting there standard basic service for $1.5 million a year, but we can do a good amount more for just a little more.
My Uncle used to work for a computer company and he said often times they would get bids to do school systems not because they were the cheapest but because they were going to take the old computers away build and install and maintain the new system.
hence companies I think the trend has been to more "value added services". More then just a truck backs up to a loading dock at some random industry and picks up a skid of coffee travel mugs bound for some screen printer and promotional materials manufacturer somewhere and it's just basic A to B service.
CF towards the end of Never Stand Still got into more fancy stuff like the more "value added services" and less trucking from A to B and sure enough found oh all this warehousing and logistics and dedicated fleets this way more profitable and not nearly as much undercutting on price and stuff lets make a business called CNF Corp where will take all our fancy companies all the Con-Ways and Menlo Logistics and use them and spin off our dinosaur LTL long haul company with it's old stinky trucks and old low tech appearance and go with something new and fancy.
Or put the other way: How many days of needed reinvestment profit did they carry away?
That's what I meant by not being aware of failure. They were chipping away at it for many years, buying stupid companies, squandering on airlines, everyone was in there chipping away for just their little piece... and then it fell.
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