A quick quiz: Name the fleet that operates 450 tractors and 1,000 trailers, employs 850 drivers and grows about 10 percent a year.
It's the private fleet operated by Walgreen Co.-an extremely fast-growing retailer with 4,300 stores in the U.S. and a new store opening at a rate of one per day. And that represents a lucrative profit potential for commercial tire dealers.
Gary Petty, president and CEO of the National Private Truck Council, explained the market and its potential to dealers at Bridgestone/Firestone's annual Bizcon meeting this month in Chicago.
Mr. Petty said private fleets such as those at Wal-Mart Stores Inc. and Frito-Lay Inc. are expected to grow at least 2 percent annually, though he's banking on even higher marks. Private fleets account for 50-55 percent of carriers. That figure is down from the 1960s, when private carriers were about 90 percent of the trucking industry, he said.
``The private fleet is experiencing now a renaissance in corporate transportation,'' Mr. Petty said. ``...It represents the largest number of trucks on the road today.''
He suggested tire dealers seek out these private fleets, which distribute their own company's goods, not only because of their growth potential but also because of their status as premium accounts. In his Walgreen's example, he said the pharmacy chain has contracted with the same employment leasing company for 26 years and the same truck leasing company for 24 years. This shows, Mr. Petty argued, that the companies are loyal to suppliers that provide good service and won't be swayed by the momentary cheap offer.
``When you're planning your strategic marketing goals in the years ahead, weigh in on the private fleet market and see how much you can grow,'' he advised dealers. ``...It's a market that's looking for premium product, long-term relationships and sustained expertise and commitment, not the short-term low cost.''
Shelby Link, national fleet account executive at BFS, also suggested in a separate seminar that dealers seek out non-national private fleets if for nothing else that they pay in cash instead of credits. ``(BFS) credit memos only allow you to buy more tires,'' he said, and they don't cover insurance, wages or rent.
Bob Morris, commercial division manager at Sullivan Tire Co. Inc. in Norwell, Mass., said private fleets represent about half of the company's commercial business. ``That's normally where you can get the better growth profit,'' he said.
The key, though, is to have enough service locations to match the fleets' service areas, he said. Most of their private fleets are regional, so they're covered by Sullivan Tire's 10 service outlets.
``The more service you can provide that's within the territory that they run, they appreciate you more,'' he said.
Another main obstacle to winning private and non-national fleets is simply finding them. Dealers and speakers listed examples such as wine distributors, construction companies and landscaping businesses as usual suspects. The common denominator of these, though, is that they are immersed in their respective industries-not the tire business.
``They're not on the radar screen,'' Mr. Petty said. ``They don't come to industry trade shows, they don't read industry magazines, they don't see your advertising.''
Of all the private fleets, about 35,000 have more than 10 trucks, including the Wal-Marts of the group, Mr. Petty said. But more than 100,000 have fewer than 10 trucks, and they're the ones who can more easily double their force, to the benefit of tire dealers who get in early.
To identify these small carriers, Mr. Link suggested dealers:
* Get a copy of state trucking association rosters;
* Get a list of commercial motor vehicle registrations (which are public records);
* Seek BFS's help in getting fleet names;
* Scan the Yellow Pages for businesses that have to transport something, and;
* Ask current customers for references.
As in many other cases, relationships also are important, especially if the manager from a small company moves up to a big private fleet and remembers the friendly tire dealer he used to work with. ``Is he going to call some new stranger? No, he's going to call you,'' Mr. Link said.
Dealers can delegate their sales force to the task with several options. Possible customers can be divvied up by the salespeople's background knowledge or by zip code. Also, the dealership can launch a sales blitz within a specific time to hit as many possibilities as they can. Some healthy competition also can help, with incentives such as dinner with a spouse, plane tickets or gift cards.
In all of this, Mr. Link warned, dealers should remember to still sell their service and its value. ``The only price that generates true customer loyalty is free,'' he said.
Mr. Petty said this task may not be so hard as many private fleets are looking for tire know-how from dealers. ``That expertise that the tire dealer brings to that fleet is invaluable,'' he said.
In fact, Jim Jacobs, sales manager for the commercial division at Boulevard Tire Center in DeLand, Fla., said his company's private fleet accounts tend to look at their relationship as a value to their business.
``It's a more stable business because we have more influence on that sector,'' he said.