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Bizcon on the Bayou: Dealers Must Deliver More Value, New Services, Fleets Say

Dealers Must Deliver More Value, New Services, Fleets Say

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Bizcon on the Bayou

Dealers Must Deliver More Value, New Services, Fleets Say

Nearly 300 commercial dealers and truckstop representatives gathered in New Orleans for Bridgestone/Firestone North American Tire’s (BFNAT) sixth Bizcon commercial tire conference. The two-day event included a mini-product expo and break out sessions on various business issues, as well as keynote addresses by John Lampe, chairman, president and CEO of Bridgestone/Firestone Americas Holding, and Crete Carrier Chairman Duane Acklie.

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Acklie’s $700 million company, based in Nebraska, has over 18,000 pieces of rolling stock making it one of the largest truck fleets in North America. And Acklie, whose father was a long-time Firestone dealer in Nebraska, also serves as chairman of the American Trucking Associations (ATA).

A recent analysis of the trucking industry showed that the 10 largest truckload carriers in the U.S. earned an average of just 1.8% on revenue, he noted. "That type of slim margin will not allow equipment replacement or survival, especially with increased downward price pressures on freight rates."

Meanwhile, average freight rates have risen 36% slower than the general inflation rate, and hard costs like labor, fuel and vehicles have increased rapidly. These factors, Acklie said, were forcing fleets to find new ways to reduce operating costs and improve vehicle utilization.

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The cost squeeze will force continued fleet consolidation, and commercial dealers will have to find new ways to help fleet customers extend their budgets. "Those who create and provide value will survive," he said.

Lampe talked about Bridgestone/-Firestone’s financial recovery and intention to turn a profit in 2002. He thanked the dealers for their loyalty to the company over the last two years, and noted their contribution to both its current recovery and its long-term prospects.

Bob Costello, the ATA’s chief economist, gave dealers a more dollars-and-cents view of the state of the trucking industry. Revenue generated per mile driven, a key measure of fleet profitability and viability, has remained fairly flat in recent years, he said, while inflation – measured by the general price level of goods – has increased. This factor shows the downward pressure placed on fleets to cut costs for their customers, he said, which has a similar impact on fleet suppliers.

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Fleet bankruptcies have risen dramatically over the last two years, Costello said, and with every 10-cent increase in fuel costs, another 1,000 truck fleets go bankrupt. Truck fleets are also feeling the effects of Sept. 11 as they watched insurance premium skyrocket last year, jumping an average of 32% even after fleets adjusted deductible levels in an effort to lower premiums. Umbrella business insurance leaped 87% for fleets, he noted.

Bizcon also featured a panel discussion by the maintenance managers of four major fleets, moderated by BFNAT’s Roy Stogner. The managers talked about how escalating operating cost issues impacted their unique businesses, and how fleets are looking to dealers to provide far more than just tires and tire services.

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In a special CEO-only presentation, Larry Morgan, chairman and CEO of Bridgestone/Firestone-owned Morgan Tire & Auto, and his banker, Dan Mahurin, chairman and CEO of SunTrust Bank in Tampa, discussed how dealers can better leverage their banking relationships for sustained growth. Mahurin suggested that dealers should look to their bankers for more than just standard services, including financial education, personal services, debt management, or help in developing annual business plans and short- and long-term business goals.

 

Bizcon also featured a series of small seminars on employee retention, communication skills, sales management, image, and dealing with change.

One new product introduced at Bizcon was BFNAT’s Fleet Sales Potential Analysis software system, designed to help dealers plan future fleet sales opportunities. The Fleet Sales Potential Analysis software allows dealers to consider fleet customers by both tractor and trailer configurations, determine the types and volume of new and retreaded tires used by a fleet, track historical tire trends, and anticipate how changes in tire types may lower fleet costs.

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BFNT also introduced four new commercial tires during the conference:

  • Firestone FS560 Plus, a high-scrub, all-position radial with a 19/32-inch tread depth designed for urban applications like waste hauling, construction and pick-up/delivery operations. The FS560 Plus is available in both conventional and low profile sizes, with G and H load ratings, for 22.5 and 24.5-inch wheels.
  • Dayton Radial Metro All-Position, a deep-tread radial for regional/urban applications, available in standard and low profile 22.5 and 24.5 sizes, with G and H load ratings.
  • Dayton On/Off Highway All-Position, a heavy-duty radial with a 19/32-inch tread for Class 6 to 8 construction, logging, refuse and other severe service applications. Both 22.5 and 24.5 standard sizes with a H load rating are available.
  • Bridgestone VCHS, a new radial container handler tire designed for improved stability and cut resistance in reach stacker and top pick applications. The VCHS is available in 18.00R25 and 18.00R33 sizes.

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