The Roemer Report March 1987
- 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 "Atomization" of Trucking
The term "atomization" has been coined by MIT professor/entrepreneur David Birchin describing a profound shift that is well underway in the U.S. economy. It is the downsizing of ourtraditional large industrial companies along with a virtual explosion in newbusinesses.We think this phenomenon has particular importance to senior trucking executives.Basically, it tells us all that the freight marketplace, itself, is fragmenting. Increasingly, you will be relying on a larger number of customers to handle the same freight volume. The implications? More widespread, aggressive, grass-roots business development efforts. New customers are literally springing up overnight. Meanwhile, many of the traditional pillars in yourcustomerbasewillseetheirfreightvolumediminish.
BEHIND THE EMERGING MARKETPLACE: David Birch (through his Cambridge, Massachusetts firm, Cognetics) has developed perhaps the nation's best ongoing data base on business births, deaths and changes. He haseffectively used Dun & Bradstreet data to develop a microscopic view of thechanging U,S. economy.Here are some of his findings:
(1) Nearly 15 million separate businesses were created in this county over the past 17years.
(2) About 700,000 new companies were formed in 1985. That compares to 90,000 in 1950 and 200,000 in1965. The 700,000 figure does not include new self-employed people or newpartnerships.
(3) Fortune 500 companies employed 2.2 million fewer people in 1985 than they did in1980.
What is happening? Consider what is happening within the trucking business, itself, and you can get a pretty good handle on the fundamental forces at work in the economy as a whole. Birch says at the heart of this "atomization" process lies the reality of competitiveness. Intense competition both at home and abroad have put pressure on our largest manufacturer. They have scaled back operations and are using many more suppliers. Over the long run this suggests a stronger, morediversified, less cyclical economy.But it also means that a concentration on a fewkeycustomerscouldproveverydangerousforyouroutfits.
THE COMING TEAMSTER ORGANIZING PUSH: Theslumbering International Brotherhood of Teamsters appears to be poised for one last big organizing push. The union appears to be taking dead aim on some strategic non union organizations that have flourished in the post-deregulation environment. The organizing targets appear to be regional outfits whose driver and dock worker compensation levels are some 40% below the prevailing union pay scales. Industry Week magazine says that many of these strategic target outfits are regional carriers that operate from a California base and move both intrastate and interstate shipments. Those cited include: Viking Freight, Inc., Santa Clara, Con-Way Western Express (a nonunion subsidiary of Consolidated Freightways, Inc.), Palo Alto and GI Trucking Company, Mirada. The way the Teamsters see it, these "new wave" trucking outfits and others of their nature are a prime reason for the sharp drop in both business and jobs in the unionized sector.
A SCORECARD ON TEAMSTER STRENGTH: In 1985,Trucking Management Inc., the trucking industry bargaining group, represented trucking companies with about 110,000 to 120,000 union members. That compares to 300,000 in 1982 and 450,000 in 1979. Today the union only represents about 200,000 to 250,000 dock workers and truckers,according to Industry Week. Two of the targeted outfits (Con-Way Western and GI Trucking) are double-breasters. That's a practice the Teamsters find both abhorrent and tough to break. But they seem to be going for the gusto on what some see as a last-ditch organizing blitz. The chances of success? Industry observers see the success probabilities as lying somewhere between slim and none. They cite the Overnight Transportation case as indicative of the organizing difficulties involved. Overnight has lost a few terminal elections. But, it has yet to sign a contract. The current reasoning is that organizing a few terminals may be possible. But organizing an entire company has become very, very tough.
THE ESSENCE OF MANAGERIAL COURAGE: In a movie or a novel, the restless manager who speaks or acts courageously to save the company looks great. But in real life, the manager who challenges existing practices can easily get ostracized or fired. That's because organizations have conflicting needs that create tension. The teamwork and procedures that promote smooth functioning canblock needed change and innovation.Managerial Courage, a new book by psychologist Harvey A. Hornstein, offers ideas for behaving courageously "without committing career suicide." His five guidelines for managerial acts of courage: (1) Watch your focus. It's best to focus on business issues, very risky to take on performance of superiors. (2) Watch your credibility.It's best if you have recognized expertise on an issue, yet little self-interest in it. (3) Be direct. Face-to-face action is to be preferred over letters, reports, etc. (4) Create supporters, not saboteurs.Show concern for the organization's welfare but be sensitive to feelings and views of others. (5) Propose solutions to problemsthat have caused pain.There's more organizational support for solving a current problem than facing one that hasn't caused trouble yet. Professor Hornstein also identified the type of manager likely to act courageously. The most successful know what they're doing and handle their bosses well. (Managerial Courage: Revitalizing Your Company Without Sacrificing Your Job by Harvey A. Hornstein, ©1986, John Wiley and Sons, Eastern Distribution Center, 1 Wiley Drive, Somerset, New Jersey 08873,$18.95)
GM CAUGHT IN THE CURRENT: Recent layoffs and plant closings by General Motors may be more a result of industry changes than company problems. Most agree that GM's 29,000 "casualties" werevictimsofanepidemicaffectingallAmericanmanufacturers...globalcompetition,thecompressionof industry into smaller, more flexible units, and modem technology. This Industrial Evolution will causemanufacturers to employ fewer workers over the next several years.GM isn't alone when it says this is merely the "first phase." Regardless of market performance, the UAW predicts that technology will eliminate 120,000 jobs within five years. Caution should be the watchword for industries in the throes of automation. Without new manufacturing practices, employee training and reforms in labor practices, robots will still make scrap...only faster. Automation does have some redeeming qualities.It has enabled some companies, like IBM, to "re-relocate," moving facilities and processes back to the states from abroad. The cost-cutting potential and flexibility provided by automation is enabling companies to create new jobs for displaced workers. Even at GM, all is not dreary. President F. James McDonald stated that the decision to close some plants was related to progress in renovating other plants and opening new facilities. In a joint venture with Toyota in Fremont, California, GM reopened a closed plant in 1984, producing more cars with alabor force trimmed from 4,000 to only 2,200.
WANTED: A NEW BREED OF MANUFACTURING DOERS: Are America's smokestack industries dinosaurs? What's the cause of our manufacturing woes--unfair trade practices, biased tax laws or the federal budget deficit? No...and none of the above, replies Peter L. Scott, chairman and CEO of Emhart Corporation, a diversified multinational manufacturing firm. In an eloquent NewYork Times editorial, Scott concluded that heavyindustry'sproblemsstemfrommanufacturingmyopia-management's unwillingness to embrace its human resource potential.Americans spent the 20 years following World War II smug in the vision of a guaranteed future...committed to "mass production psychology" and convinced that our markets were "safe havens." When we awoke to the weakness of sequential (as opposed to diversified) manufacturing, we panicked. In typical knee-jerk response, we scurried offshore for lower labor costs and called for trade barriers against Japan. Scott deplores our nearsightedness, insisting that American industry cries out for encultured innovation. As he puts it, "Weneed fresh, uninhibited talent that is turned on by the bustle and pace of life on the factoiy floor...people who thrive on solving practical problems...capable of original thinking, systems planning and leadership." Technical competencies in ample supply; what we so rely need are individualism, innovation and initiative.
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