As Heraclitus said 500 years before the birth of Christ: ``The only permanent thing is change.'' Nowadays this is certainly true in U.S. industry and especially so in the trucking industry. Change has certainly been a constant since Congress deregulated the trucking industry with the passage of the Motor Carrier Act of 1980. Since then, hundreds of carriers have disappeared from the roadways.
Remember fleets like McLean, Red Ball and P.I.E.? Gone. Victims of deregulatory change in the early 1980s.
But this exodus has not stopped. Where are St. Johnsbury, Smith Transit and Churchill? These are fairly recent victims that have evaporated into thin air. Many more are gone, such as Central Freight Lines, Spartan Express and Carolina Freight, which have been assimilated into other companies within the last year or so.
You may ask, ``What the heck is going on? What's happening to my customers?''
The answer is: ``change.''
In the early 1980s, big fleets got bigger, little fleets tended their niche markets and the mid-size carriers-which had all the economic disadvantages of their larger competitors but none of their economies of scale-got squeezed out of business at the beginning of the Never-Ending Freight Rate War.
This war is still raging.
In 1994 and 1995, fleets bought record numbers of new tractors and trailers believing that the economy was strong and booming. But in 1995, the economy slowed much more than anyone anticipated. The combination of this slower economy and excess capacity drove freight rates lower.
In fact, freight rates have not seen any real improvement in 10 years. As a result, all of the largest less-than-truckload carriers and most of the large truckload carriers incurred losses of many millions of dollars.
That is significant change.
Add to this the changes taking place in industry in general. Never before have we seen such willful restructuring in business.
The 1980s was the decade of ``horizontal and vertical integration,'' in which business was encouraged by management gurus to supply all inputs needed for its operation internally, and to establish businesses that handle every aspect of processing the raw material through delivery of the product to the customer.
Now the mantra of the 1990s is ``outsourcing'' and ``core business.''
``Do only what you do best and get rid of the rest!'' You've got to love these business gurus. They are really into change.
And as commercial tire dealers, you need to be, too. For with change comes new opportunities as well as challenges. Knowing how change is affecting your fleet customer and how the fleet is reacting to it will help you to revamp your business approach to capitalize on change.
This isn't always easy to accept. But remember the guy who wouldn't dream of his wife working? He's the same guy who now wakes her up in the middle of the night to suggest that she ask her boss for a raise.
To deal with the pressures of change in the trucking industry, fleets are focusing on getting a grip on their expenses in an effort to reduce them-drastically, if possible. Remember, they haven't had a raise to speak of in 10 years! The fact that tire and retread prices have not gone up appreciably during this period is no coincidence.
In this regard, don't expect much change. Economists and other prognosticators aren't counting on significant growth in the economy or a reduction in overcapacity, so the Never-Ending Freight Rate War will continue into the unforeseeable future, and price increases for truck tires and retreads will be the innocent victims.
However, there are other changes that present great opportunities! Fleets looking to do what they do best-which is haul freight-are looking for alternative ways to maintain their equipment.
The ``maintenance department'' has always been viewed by fleet operations as a necessary evil that slows down freight hauling. Now there is motivation to get rid of this function entirely and ``outsource'' it.
Contract maintenance is growing at approximately 25 percent annually for some of the major leasing companies. It follows, then, that contract tire maintenance could be a very profitable and beneficial relationship for both the fleet and the dealer. It provides the dealer with a locked-in account for tire, retread and related-services sales and enables the fleet to reduce its labor and liability costs and focus on its ``core business.''
In addition to the need to get a grip on costs, fleet mergers and acquisitions in the industry are changing the way many multi- location fleets are making their tire and retread purchases.
In many cases, fleets are cutting national account deals with tire and retread companies or have moved their decision-making authority to a central headquarters location.
Dealers who once were accustomed to working with the local fleet manager and may even have had a good rapport with him, now are finding they have lost the business since the tire purchase decision has been moved hundreds of miles away.
Dealers may need to travel to a location out of their commercial area to call on the tire purchasing agent now or be part of a national account network the fleet has chosen.
Either way, it is always best for the dealer to call on the purchasing agent so that the agent knows the dealer he will potentially be giving business to. For the fleet, knowing a dealer is preferable to picking one off of a dealer list.
Providing a better product and/or service than the competition is a winning concept that has not changed. Identifying specific needs and offering innovative solutions to them adds value that fleets recognize and want.
Success in this area comes from understanding your current fleet customers and your potential fleet customers in addition to your own business; knowing who you are and what you do best.
The more you understand these things, the better you will be able to team with these fleets to find solutions to reduce their costs, let them concentrate on their core businesses and run your own profitable commercial tire business as well.
Some mental midgets say, ``Change comes to those who wait.'' Well change isn't coming, it's here. Don't wait too long to embrace it. Remember, when you're through changing, you're through.