The Roemer Report December 1986
- Leased Operator Semi Truck Insurance Quotes
- Bobtail Semi Truck Insurance Quotes
- Occupational Accident (Occ Acc) Semi Truck Insurance Quotes
- Cargo Semi Truck Insurance Quote Form
- Commercial Auto Liability Quotes
- Physical Damage Semi Truck Insurance Quotes
- Owner Operator New Authority Semi Truck Insurance Quotes
- Non-Trucking Liability Semi Truck Insurance Quotes
- Contingent Liability / Contingent Cargo
- Motor Carrier Liability
- Primary Auto Liability
Trucking is Leaner and Meaner
According to the ICC's latest statistics, the trucking industry is looking leaner and stronger than it did this time last year. And that bodes well for 1987. Even insurance problems while still sticky, seem to be smoothing out in some quarters. The coming year will tell whether or not we've seen the worst. What else is worth watching on the motor carriage scene? Here are five top trends…
- Recent federal evaluations confirming the safety of double trailers. Some experts feel that the approved use of doubles could be a boon to the industry.
- Continuing consolidation in less-than-truckload (LTL) carriage. This will affect not only regional carriers who specialize in over night and two-day transport, but national carriers, too.
- An emerging preference for "one-stop shopping." Shippers are in creasingly relying on a single carrier that can act like an arm of the company--keeping a sharp grip on shipping schedules.
- More competitive LTL pricing. Insiders predict that competition will continue to whittle away at the number of carriers until only the industry's strongest survive.
- A decline in unfunded pension liability. Wisely, union trustees are now more willing than ever to bring professional money managers on board.
THE "SHIPPER'S SHIPPER": These days third-party distribution is looking mighty attractive to major manufacturers. A growing number of capital and finished goods producers now farm out their warehousin and shipping operations. There are two key reasons why:(1) Third-party distribution frees up capital for more effective, revenue-producing investments. (2) By turning distribution over to the experts, management can focus on what it does best—manufacturing…Mindful of manufacturers' demands, leading third-party distributors offer top-of-the-line automation and JIT deliveries. Sophisticated equipment and expertise enable them to turn over shipments quickly, accurately and economically. Industry experts predict that third-party distribution is an idea whose time has come--and will endure. Deregulation, in tandem with technology, has delivered a broad and highly motivated prospective client base. We are entering the era of the "shipper's shipper."
WHAT'S UP IN THE WEST? Federal deregulation of trucking is, for the most part, a fait accompli. But the intrastate scene is still a hodge podge. While most states are working toward deregulation, a few have made a U-turn. Here's the score. Only seven states now have fully de re ulated intrastate truckin (or were never regulated in the first place )--Alaska, Arizona, Delaware, Florida, Maine, New Jersey and Wisconsin. Nineteen states permit single-source leasing, and 16 states allow compensated intercorporate hauling. Yet several states are eye ing increased regulation. The ones to watch, experts say, are the bell weathers--Texas and California. Texas is toe-to-toe with the ICC on interpretation of "in-transit privilege." The ICC disagreed with Texas shippers, who then took their gripes to a federal court of appeals. But the case was thrown out till the ICC reaches decisions on two related complaints. In California the battle this time is not with the ICC, but with the California Public Utilities Commission (PUC). It's the same old refrain, however: more restrictive rate justification. Keep an eye on the west to see if Texas and California are starting trends...or just spinning their wheels.
ASSESSING CORPORATE CHALLENGES: Consider the vast array of challenges confronting most corporations today: (1) Technological advances have spurred international competition and accelerated product life cycles. (2) Rising costs in new product development are leading many firms to undertake joint ventures, often with foreign partners. (3) Rapidly changing consumer tastes mandate greater production flexibility. (4) Regulatory changes are impacting diverse industries--trucking, banking, telecommunications and airlines, to name a few. These pressures are likely to accelerate rather than abate in the years ahead. Thus, the single greatest challenge facing any company today is keeping pace with change while avoiding or minimizing missteps. Yet managers tend to trip up their own best efforts. They cling to strategies that worked under the old system of a relatively stable business climate. Writing in California Management Review, Jay Lorsch recommends an incremental approach in fundamental change. Top managers should invest the time and energy in following these carefully calculated steps: (a) Define goals and obstacles.
Determine whether or not the problem(s) can be solved with only minor modifications.
If major changes are needed, develop a shared awareness of the commitment required.
Anticipate a period of resistance and confusion. (e) Define a strategic vision. (f) Experiment--and accept reasonable risks.
WHEN THE GOING GETS TOUGH: The adage has always been, "As Detroit goes, so goes the nation." If this is true, having an economy tied to fluctuations in the auto industry may be a poor marriage in 1987. You can't stay up forever. After four years of boom times, experts are just waiting for the bottom to drop out of the always-volatile new car market. Positives, like low interest rates and gasoline prices and competitive pricing with imports, are being offset by as many negatives. Lee Iacocca has voiced serious concern over the trade and budget deficits and a possible recession. The bigger they are, the harder they fall--and the auto industry is no exception. One forecaster feels production could drop by one million vehicles in '87. U.S. auto executives continue to try and battle the surge of imports expected to eat 40% of the market share by year end. Now there's even competition from "American made imports" with new Hondas, Nissans and Toyotas flowing from Japanese plants built in the U.S. Auto manufacturers are being forced to choose between market share and higher profits in some instances. Ford has opted for profits ($702 million in the third quarter), while GM, stressing market share, has suffered a $338 million operating loss. Ford has also scored a hit with its Taurus and Sable, while Iacocca continues to kick himself for not building more Chrysler minivan capacity. Will Americans abandon the small car market? Will imports dominate the luxury car segment? Stay tuned. The fight for the consumer dollar is just beginning.
150 COMPANIES CAN'T BE WRONG: In a world fraught with half-baked theories and nebulous philosophies, it's not often one finds a sure-fire formula for success. Information gleaned from founders of nearly 150 top growth companies shows that each of them evolved through a cycle of four stages. No fair skipping, either…each of the following was integral in achieving success: (1) The idea--Originality is not mandated here. In fact, some of the best "inventions" are mere improvements on an existing concept. The chairman of a successful publishing company warns against chasing wealth--"Set yourself a commer cial goal and accomplish it. Wealth will follow." (2) Marketing--The key word here is "definition." Many a unique product has died a cruel death at the hands of a poorly defined market. Copying a good idea from successful role models can be profitable, but the same can be said for marching to the beat of a different drummer. Marketing points have been scored by using different approaches, like upgrading, downgrading, bundling and unbundling. (3) Management--Entrepreneurs take heed--a great thinker does not a great manager make. There comes a time when all company founders must learn to delegate; sometimes a very frightening psychological step. (4) Encore--Successful entrepreneurs have learned to follow a great opening act with an even better second act. Fear of failure must be suppressed to avoid clinging desperately to the "first born." The motto…"Go for it."
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