Date: Fri, 1 Sept 2000
From: "Archie C. White, III" <ArchieW@acwhite.com>
Subject: RE: AMS-Forum What would you do?
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Herb said this business is just getting tougher all the time.
Larry said, the industry is out of control.
They are right on target, in fact I remember having the same thoughts back in 1966 when I started. Back then, all you had to do was take care of your customer, and the profit was built into the regulated tariff. The business was still hard then, but its harder now, trust me.
Now you still have to take care of your customer, but you also have to be the low bidder, whether its the bound COD or the national account contract at 59% with free valuation, free this and that and frozen rates etc.
Well, I think I have figured it out, and its only taken me 34 years. Here's my theory, we let the Salespeople set our prices.........Yes, that's right, we let the salesperson make deals we have to live with for a long time. I love salespeople, some of my best friends are salespeople, and like the old saying goes, Nothing happens until the sale is made. But, having said that, We let the person who has no equity in the business decide how much our customer is going to pay.
This summer has been our worst in several years. More service failures, and lower profits. We get whipsawed by the packing material increases, newsprint increases, the fuel increases,(remember, your packing vans and cars and service vehicles don't get any fuel surcharge) fraudulent claims you can't deny, driver shortages, labor shortages, on and on. We could have done probably 30% more business this summer if we had more help. We are turning down business and still have trucks sitting idle. Insane.
What have we done about it? We stopped sharing any overshare on discount. Used to, a salesperson could go over the "shared" discount and we would split with them. Not anymore. We have given them a monthly window of dates that short haul discounts are limited. We put our own in-house tonnage acceptance group ( that's TAG team to you non UVL'ers)and a management person makes a decision on every job that deviates from our minimum threshold. Short haul jobs, with no packing, high discounts and tight dates are not profitable, but we used to blindly take them and clog up our system, and when we got closer to the cut off's had to turn down better stuff because we had already loaded up with crap.
Unfortunately, we waited until August to figure this out, so maybe next year ( don't the Met's fans use that expression a lot?)
We also have applied to be a Military Transportation Provider for the new Full Service Moving Project, and if that test gets started, we will be doing military business on decent civilian rates. In the past we were doing military short haul on a 73% discount.
And the lady with the marble top she didn't want crated got mad and hung up on us, so we dodged that service failure.
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