The Roemer Report January 1988
- 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
The Road Ahead in 1988
The road ahead for mosttruckingcompaniesisn'tparticularlyclear. Most economic forecasts are based onhistory. Since nothing like Black Monday has occurred in modern time, we are not exactly dealing with a detailed historical road map in plotting the economic terrain that lies ahead. Several indicators do suggest that the panic on Wall Street hasn't crippled the natural economic resilience of Main Street. The consensus ofapproximately50economists by Blue Chip Economic Indicators calls for the realgrossnational product to grow about 2% in 1988. Here are several other forecasts for the coming year: Inflation. Consumer prices are projected to increase 4.3% in1988.Thisnew year estimate is slightly above the 3.8% to 4.0% range forpreviousyears.Interest Rates.Interest rates should stay under control and perhapsdrop alittle.Current consensus suggests three-month Treasury bill rates shouldrangearound6% and top rate corporate bond rates hoveringaround9.75%. OilPrices.Thelarge glut in oil supply is responsible for oil prices that haven't been thislow sincethe early 1970s. Even with more turmoil in the Middle East and are vivid OPEC producer would be hard pressed to sustain major oil price increases. Translation? Great prices for diesel fuel. Trucking Labor Supply. The shortage of qualified drivers is expected to intensify. Some believe a 30% truck driver shortage is on the horizon. Industry experts predict a shortfall of 150,000 drivers by the1990s. Federal Trucking Legislation. Congress' new budget did not include an increase in fuel taxes. Also escaping the Congressional tax increase package was the alternate minimum tax. A Bright Spot: The devalued dollar and a protectionist climate at home is causing a wave of Japanese manufacturers to locate facilities on U.S. soil. World currency rates are responsible for what is beginning to look like the second U.S. Industrial Revolution. Astute trucking companies will carefully track Japanese OEM's and suppliers capitalizing on new freight opportunities.
AMERICAN INDUSTRYISREVIVING: "Deindustrialization," once slated to be the doom. of America, seems to be reversing itself. U.S. industry is operating closer to capacity than it has in a decade. Even the besieged steel industry is seeing a sharp rise in capacity utilization rates-83% on average. Companies in many industries-most notably paper, textiles, chemicals, and aluminum-are running at better than 90% capacity. Analysts are beginning to speak of a Rust Belt revival.Coming as it does on the heels of October's market crash, this is good news indeed. With America's smokestacks steaming again, we can count on more trucks rolling the nation's highways in 1988-and beyond. What's behind the recovery? Insiders say it began when the dollar tumbled from its February 1985 peak. Recent drops can only fuel American manufacturing-and trucking.Companies now buy more of their raw materials and components from U.S. suppliers. Some firms are even bringing offshore operations back home. Clearly, it's time to be bullish on basic industries again. And, as manufacturers find themselves flooded with orders, carriers face a long overdue challenge: to speed up massive deliveries and relieve bottlenecks.
TRUCKING AND THE MANUFACTURING SEA CHANGE: Something major is rumbling beneath American Industry. We see prospects for the industrial sector of our economy as extremely good in 1988. One notable exception is the domestic auto industry. Its plight isn't bad. Detroit will simply have a hard time matching the booming sales levels of the past five years. Consumers simply need a breather to pay down their debt. But now most other categories in the industrial sector seem to be picking up steam...a good sign for our economy and trucking. Production-led growth with a higher consumer savings rate will be necessary for the nation's long-term health.But we sense something even deeper. Policy makers and serious thinkers around the nation have begun to focus in on the strategic role manufacturing plays in our economy. The conclusion? The wealth of the nation ultimately depends on its ability to make products. Expect increased fiscal and economic support for this point of view.That's why Treasury Secretary Jim Baker has allowed the dollar to drop. There's also another new wrinkle here. For the average manufacturer, direct labor costs are now about 10% of total production costs. Hence, offshore production makes less and less.
THE NEW TRUCKER: Talk with CEOs and corporate divisional managers throughout this country leaves us increasingly positive about the future of domestic manufacturing. They are dead serious about quality, productivity and cost competitiveness. U.S. industry. for the most part, has become lean, meanand hungry to do business.Yes, their payrolls have been reduced, but the freight will still be there for good truckers. The Japanese see the handwriting on the wall on currency rates. They will be moving plants over here in droves in our judgment. Now, here's one tip we would make after discussing strategy with many manufacturers. Get obsessive about the quality of your service to industry.We're not talking about some kind words from your outside business development people. Get everybody in your operation thinking "the customer first." Consider the strategic plans of all the domestic automotive companies and every single major manufacturer that we have seen. Unanimously, they contain detailed numerical measurements for quality and service. Three factors will be pivotal to your efforts in gaining additional market share: quality, service, and innovation. They are the flywheel of the new manufacturing and the new trucking.
THE PATH OF LEAST RESISTANCE TO NEW BUSINESS: Most organizations attempt to increase sales, market share and revenue by designing innovative marketing efforts to get new customers. But new customer hunts are often undertaken at the expense of your current customer base. The cost ofsecuring a new customer is significantly greater than the cost of satisfying and keeping your currentcustomers. In fact, well-served current customers may be your most powerful avenue to a new customer. Today the current customer is key, and the word relationship is critical. More than ever, the vital element in your company's growth is a well-served customer. Customer satisfaction and a true business partnership with those who really create your paychecks are the springboard for new business. Relationship management based on a philosophy of under-promising and over-delivering will generate new customer referrals. The best and most enduring approach to new business is a constant upgrading of service to your existing customers. You can maximize your company's profitability by being more responsive...spending more time...and developing a deeper relationship with current customers.
THE CASE FOR EMBRACING CHAOS: Here's a shocking revelation from the pen of Tom Peters, co-author of In Search of Excellence and A Passion for Excellence: There are no excellent companies... no firms so good that they can afford to get complacent. In his new book, Thriving on Chaos, Peters suggests that the old saying, "Ifit ain't broke, don't fix it," is giving way to this reality: "Ifit ain't broke, you just aren't paying attention. Fix it, anyway!"Peters contends that there's no such thing as a disaster-proof organization. The late 20th century is an era of constant, turbulent change. The only way to survive amid such flux is to embrace it...to learn to thrive on chaos rather than letting chaos thrive on (i.e., destroy) you.Following are some of Peters' prerequisites for accepting and managing change: (1) Shed unnecessary bureaucratic layers. (2) Develop more autonomous units with the local authority to introduce and price products and services. (3) Differentiate by producing high-value-added goods for niche markets. (4) Become both quality- and service-obsessive. (5) Respond quickly and thoroughly to your customers. (6) Speed up the pace of your innovation. (7) Hire highly skilled, very flexible workers. (8) Treat employees as partners: keep them well-informed and well-compensated. Make them aware that they are the company.
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