The rising cost of fuel (gasoline) has had a major impact on the transport industry, recently. Diesel (distallate) is reaching record levels, especially here in Australia. Transport and logistics is critical to business. Nothing much happens in commerce without a truck being involved in some manner, at some time.
A transport operator telephoned me and said he had been referred to me as someone who sees problems differently to most and that he needed my help. "Ric, here are my credit card details, charge me what you will, so we can talk."
He asked, "How do we handle these crippling diesel prices? Our costs are rising such that our margin is almost non-existent! What can we do in our business to cut costs and survive?"
I could almost feel the pain in his voice. "Are there currently any departments within your organization that are not running lean and should quite easily curb unnecessary expenditure?"
"No. We have cut costs to the bone."
"Then, pass on the increased fuel costs."
"We couldn't possibly do that. Our competitors won't and we will lose business to them."
"You don't have to accept my advice, but here's your decision: pass the operating cost increases on, and yes maybe you will lose some business. Or, take the hit yourself and before long - you will go broke and be out of business all together."
Your competitors should not dictate your pricing policies. They're probably making some really poor choices, so why emulate someone else's bad management?
The transport operator is now a fully-paid member of my Target Mentor Program for the next six months. And, at least I know he will still be around in six months, even though some of his competitors won't.
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