Last week, I wrote about staying the course when it comes to fuel economy because trucking is not the only industry to use diesel fuel and we have no control over demand from other markets.
At the risk of repeating myself, I want to revisit that idea again this week. While no one is on record indicating that a recession is in the offing, some economists are starting to see some warning signs of an economic slowdown.
Here’s what some sources are reporting:
- The Institute for Supply Management’s Purchasing Managers Index, which measures general economic health, dropped in November, as did the Cass Freight Shipments Index.
- Commodity prices are weak.
- Trucking stock prices are down.
- Kenny Veith, ACT Research’s president and senior analyst, says “The list of indicators flashing yellow became longer and brighter.”
- Avery Vise, FTR’s vice president of trucking, says while FTR’s monthly Trucking Conditions Index should remain stable in the first few months of 2019, the second half of the year will be noticeably weaker.
Like I said, no one is in Chicken Little mode yelling, “the sky is falling, the sky is falling.” But, we’d be naïve not to start paying some attention to what’s going on in the general market that drives the demand for trucks. Those of us who have been in this industry for a few decades have been here before. And for me personally, I wish I was better prepared to see it coming.
The time to get control over your expenses is when times are good. Waiting until bad times hit and then trying to take action is never the best strategy.
My suggestion is that you take some time to do a thorough review of your assets. Look at the data — we certainly are lucky to have so much of it at our fingertips. Are there trucks in your fleet that are falling outside the norm in terms of things like MPG, uptime, idle percent, time in the shop between PMs?
Check out those that are “overperforming.” How are they spec’d? How are they being driven? Then do the same for those that are “underperforming.” Are their engine parameters set properly? Do the drivers need a refresher on how to drive to achieve better fuel economy? Are there some technology investments for those trucks that make sense given their age and duty cycle that will bring MPG up and idle percent down?
Where possible take the best practices from the overachievers and apply them to those trucks at the bottom.
I understand that there may not be anything you can do. Some investments won’t make sense and maybe your drivers are doing a helluva good job using cruise control, limiting idle and avoiding hard stops, etc. But unless you look at each asset, you won’t really know what’s working for you and what isn’t.
Sure the asset review will take some time, but if it leaves you in a better position when the downturn comes, it will have been worth it. And if the indicators are wrong and the economy keeps humming along you’re still better off because your trucks will be more efficient. Give it try. After all, what do you have to lose? Just a little time.