RE: U.S. Economy to??
Phil,
OK I see what you are driving at but the issue is that this is a niche service market and part of an industry that has too many factors involve to say how this or that will effect us. The customer base was at one time only automotive but that is no longer the case and many industries depend on this service to fulfill the needs of them and their customers. To put it mildly, a slowdown could effect the entire trucking industry or it could effect only a part of it or nothing at all, but with that said, this niche market is not truck driven but service driven in many cases – somewhat analogist to other industries in which they give just an added service to retain customers.
“I am from planet earth.â€
Are you sure? Not from some planet they talked about on MIB? You know they have some really smart aliens from those planets. Just kidding.
“True. I was talking not about markets but economic components like inflation and business cycle components like recession. The fed acts very much with those long term items in mind. Those are the items that require time to react to changes the fed makes.â€
Markets drive the business cycle and other things like CPI more than most would think and many businesses look to the markets to see what they can do to increase profits. Inflation is also market driven as is the home building market and other markets. Point is that you need to dig a little deeper than aggregate of things to see what direction they are going in. The Fed has been very slow to react to things in the past 8 years and the age of intervention has been over but they don’t understand it, like the meddling in the housing market and the real experts say leave it alone. We don’t have a tight credit problem, the interest rates were lowered, so what is going on? (don’t answer that, it is rhetorical) The policies of the administration which are truly disastrous coupled with the lack of governance in departments like the FTC have been allowing a setting of a course that will be disastrous for the country and the fed’s in general have not looked over the horizon on any issues facing us for a long long time.
“Just like the talking heads on the TV business stations, we can discuss individual components to death. You talk raw goods, I can counter with jobs data. You talk metals markets, I can counter with currency rates. No good end is served by that here in the Open Forum. You are free to elaborate on all the data you wish without challenge from me.â€
I somewhat agree with you but with a caveat.
“They are for me. You turn on the news, the rate of economic growth is announced in the form of GDP growth. As far as I am concerned, by taking note of that figure, you have accurately guaged the rate of economic growth. When I read that the U.S. dollar is worth $0.92 Canadian, I believe I have accurately guaged the strength of the U.S. dollar against Canada's.â€
Yes Phil but numbers are deceiving when reported without a complete picture. The GDP is not a simple number but rather needs to be looked at with all numbers both negative and positive.
“Again, I am not going to get bogged down in needless details or play indicator ping pong with you. Trucking industry economists have no trouble making industry projections that trucking companies rely on. Every publicly held trucking company discusses industry conditions and says what management is doing in response. Exact science? No. But lost in the fog? Also no.â€
No ping pong here, a few years back the trucking industry economists also predicted a bunch of things that never came true and to reinforce my message - this is not mainstream trucking.
“Business needs are dictated by customers. No arguement there. Customers are not always rational. No arguement there either. Individual business actions cannot be predicted. Also true.â€
Great, agree again.
“Not true. In even the most severe recessions, there are bright spots, places where growth occurs.â€
Yes true, every industry in a severe recession is effected as with any sort of depression.
“That is true but an economic slowdown is clearly underway. That is indicated by GDP numbers.â€
Read on...
“>I felt that the carrier, many of which are not in this for
>the long haul (pun intended) have been short sighted and
>rather lazy, is the key to any success. Those who are short
>sighted and lazy don’t look at these economic changes and
>start planning for them, while many others, including one
>that we both belong to have been changing to conform with a
>more corporate need and shifting customer priorities. I am
>starting to believe with the up and coming serious changes
>in the niche market that was created around emergency
>freight will drastically change and the need of the customer
>will be further reduced to the point that many companies
>will no longer offer expedited freight with short turn
>around times but rather fit the customer’s needs with a
>longer shipping time at substantially reduced rates.
That is your belief. I am not as certain as you.â€
I am not certain but it is probable with the outlook of things in general. Remember Phil that we can have an adjustment period with a down turn of the economy that may not be drastic but also lose more of our manufacturing base which may not drive a downturn in the growth indicators or the markets. The UK effect of the 70’s/80’s may not hit us like it did them and we may see a bounce back of the growth in general with more of a shift out of manufacturing to retail and service.
“If your balance sheet (and income statement) tell you that you are not producing revenue, you will, make changes to start producing revenue again, will you not? No mystery there.â€
Balance sheets can not make a true comparison on how a company that you are contracted is doing, sorry. As you will read on, I make the point that the customer is the source of revenue, not you.
“The comparison will tell you that your revnue has changed. That would prompt a prudent business person to react.â€
Yes being prudent is a good thing but not being able to figure out to react is another matter.
“I am in FULL control of my situation. I am not in control of external factors like economic growth and changes in carrier business strategies. But I am in FULL control of MY situation. My emotional and rational responses to external factors, in other words, the choices I make or do not make, determine what shows up on my income statement and balance sheet.â€
Really Phil, I am sorry, I mean I honestly apologize to you and Diane for this but I don’t care what you are in control of, it does not make me any money so I don’t care. I don’t derive anything off what you say in relation to my statement, so either I am as dumb as a stone because I missed something (which I doubt very much) or you stated something that is too far over my uneducated blue collar thinking head or it is a great deflection (no need to reply). My statement basically says that people who insist on saying we are sales people for the company miss the part that the company does not view us as a sales force at all. I have already crafted (God I hate that word) a nice but rather informative letter for a small program and even included some cost analysis that allows the contractor to be a sales person for the company but I don’t think it will go far for a number of reasons I can explain off line to anyone interested. I think that we, the contractors have a real vested interest in making FedEx (in our case Phil) successful and if properly trained, we can make a difference (hope panther was ignoring that).
“There seems to be a difference in views between us regarding your "unless the company let's you" attitude. I have been in this business, serving the same carrier, for four years. While my carrier and I have a contractual relationship that spells out our respective responsibilities, the bottom line is my carrier is my customer.â€
Phil, sorry but it does not matter how long you have been in this business, it is different four years ago than it is today. The point I am making is that the company can allow you to book your own loads or not and when you can not, you have no control – simple point.
“In a very real sense, my carrier is the only customer I have. I profit by serving my customer. If the customer no longer enters my store, so to speak, with enough money to keep me in business, I will go looking for other customers. If necessary, I will open a different kind of store, maybe something like "My Own Authority R Us." But if it is not necessary, I'll continue to mind the business I have. I am also open to changing how I do business to continue serving my customer of choice.â€
See I first thought that way a long time ago when I was in the retail business but when I entered into the medical field, the doctors and clinics I worked with were not my customers, the patients were. It was the patients who really depended on my work to ensure that the doctor got the right information about them. That made patient my ultimate client, not the company I worked for or the doctors I served, they were only vehicles of revenue generation. I carried this throughout my other ventures and it gave me a path to success, like the DRP work and the Pharma work (which by the way was also stressed at the Pharma company we were working for the patient not the company) and I carried it to FedEx. Rather than thinking FedEx is my customer, I feel every place I go to where I pick up or drop off is the customer, not FedEx. I am a tool for FedEx, a service provider for them to use, not for them to ‘use’ if you get the difference I am inferring to.
But with that said, I know you may not get this part; FedEx has an obligation to me because of my relationship with the customers I serve as a service provideras art of FedEx and the two way obligation in servicing that customer (the customer service cycle I mentioned before). Sounds kind of odd but because I made a commitment to the customer, FedEx made a commitment to allow me to continue to provide that service and seek out more opportunities for both of us to generate revenue. With that twisted way of thinking (which I think follows Peter Singe’s philosophy or maybe Peter Phillip’s philosophy don’t remember) we are all winners when I provide the best service I can at the same time FedEx proactively looks for more opportunities for me to provide that service. In turn there is a snowball effect that can only take place if FedEx does it’s part by following up with the customer, etc..I know I am repeating myself but I don’t think you get it.
“I could not disagree more. No carrier determines how successful I will be as a truck driver. The moment it becomes clear that a given carrier is not paying my price, or that adequate opportunites are not available, that carrier is history and I will seek success someplace else; either with another carrier or with another business plan.â€
The company that you are contracted to limits your use of your truck to generate revenue, which is an absolute fact that you can’t get around. I don’t mean that you can’t break the contract or leave anytime but what I mean is that your revenue generation potential is directly related to the activity that the company has in both booking loads and proactively seeking out more revenue. If the company is a dud, like a few are, well the contractors are not going to flourish, right?
But taking this a step further, as you are service price driven, if all the companies have come down to the lowering their rates to be competitive which happens to fall below your near rock bottom operating level, there is no where to go except out and your business plan should not be changed to reflect the drastic reduction of the rate for these opportunities at sub-acceptable levels but rather have some contingencies to help you with a path of liquidation.
I honestly can not believe that you would be even worried with any down turn of economic conditions, it seems to me that you are in a different class than most anyway and the doom and gloom predictions are just that in many ways, predictions. I would be more concern with the negative impact of the tax system which tied with a lack of real savings and decreasing interest rates which may cause more manufacturing to move off shore coupled with the Mexican issues increasing daily, than any predictive slowdown from the feds. I also think that increasing interest rates is the best thing right now and a serious look at a very serious change in our punitive tax codes.
