Cutting and controlling communication costs

July 18, 2002
Trucking companies are experts at managing the costs of fuel, maintenance, tires, and other business expenses. But Roger Oustecky, vp for MSS*Group Inc., says that expertise does not necessarily translate to the oft-times confusing world of communication costs Oustecky explained to Fleet Owner that communications are typically one of the top five operating expenses for a corporation, and added that
Trucking companies are experts at managing the costs of fuel, maintenance, tires, and other business expenses. But Roger Oustecky, vp for MSS*Group Inc., says that expertise does not necessarily translate to the oft-times confusing world of communication costs

Oustecky explained to Fleet Owner that communications are typically one of the top five operating expenses for a corporation, and added that many companies are overcharged for the services they receive, by 7% to 14% on average.

"You can't take telecommunication service for granted anymore; this industry is notorious for its inability to bill for service correctly," he said.

Oustecky said Denver, CO-based MSS manages communication billing and provides a complete electronic record of all bills to its customers – via a secure Internet link – to cut down on paperwork costs.

"One way telecommunication companies make money is to shorten the billing cycle to between 10 and 15 days, and then charge up to 20% in some cases per month in late fees," he said. "We speak the language of phone companies to prevent that."

CEO John Podrovitz added that deciphering today's complex phone bills is another important skill. "For example, he told Fleet Owner, there are 12 to 15 different taxes on a phone bill.

"One phone company then added in a 1% property tax to its bill – really a surcharge to cover its taxes – which is something the untrained eye wouldn't notice," he said. "Items like that become negotiable when you closely manage your communication contracts."

The key for most trucking companies, said Podrovitz, is that most operate over a geographically dispersed area, which can make centralized control of communications much more difficult.

"It can be hard to get your arms around communication costs if you are spread out," he said. "That's why centralized control and management of phone service can save a company money over both the short and long run."

About the Author

Sean Kilcarr | Editor in Chief

Sean previously reported and commented on trends affecting the many different strata of the trucking industry. Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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